House Democrats question IRS audits of Trump taxes

[February 08, 2019]  By David Morgan

WASHINGTON (Reuters) - Democrats in Congress raised questions on Thursday about the Internal Revenue Service's ability to effectively audit President Donald Trump's tax returns, as they began hearings intended to result in obtaining the documents and making them public.

A tax oversight panel in the House of Representatives heard testimony from expert witnesses as it considered a Democratic measure that would require presidential candidates to release their tax returns, codifying a voluntary practice that existed for decades until Trump ran for president in 2016.

The legislation is unlikely to become law. But a separate Democratic plan to request Trump's tax returns from Treasury Secretary Steven Mnuchin under federal law in coming months is fast becoming a political lightning rod for Democrats and Republicans.

Trump has cited IRS audits of his personal tax returns as a reason not to release them to the public. He has also retained ownership of extensive hotel interests and other business ventures as president, raising questions about potential ties with Russia and other possible conflicts of interest.

Democrats need to decide how to justify seeking Trump's returns, and some lawmaker comments on Thursday appeared to bolster an option being considered that would place such an action within established congressional authority to oversee the IRS.

Republicans rejected the need to obtain Trump's tax returns, saying a required annual IRS audit of presidential tax records should provide adequate safeguards without threatening the privacy normally afforded to individual tax data.

"But I'm concerned that the IRS may not have the ability to accurately and fairly carry this out, free from political pressure," Democratic Representative Suzan DelBene said.

Demonstrators have coffee after a protest march in response to President Donald Trump's refusal to make his tax returns public in Philadelphia, Pennsylvania, U.S. April 15, 2017. REUTERS/Mark Makela

Representative John Lewis, Democratic chairman of the House Ways and Means oversight subcommittee, drew a parallel with the Watergate era, citing an IRS audit of former President Richard Nixon that congressional investigators later discovered had missed nearly $480,000 in owed taxes and interest.

"Should the public know whether the person who is running for the office or who is currently leading our nation paid the correct amount of tax? In the case of Nixon, the answer was 'yes,'" Lewis said.

"Is it fair to expect the IRS to enforce federal tax law against the president?" he added. "In the case of Nixon, the answer was 'no.'"

House Ways and Means Committee Chairman Richard Neal is under growing pressure from Democratic liberal progressives to move quickly on Trump's taxes. Some committee Democrats said a request could be two to three months away.

Republicans say Democrats would overstep their authority and set a dangerous precedent.

"In reality, this is all about weaponizing our tax laws to target a political foe," said Republican Representative Jackie Walorski. "Privacy and civil liberties should still matter in this country."

(Reporting by David Morgan; Additional reporting by Richard Cowan; Editing by Peter Cooney)

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