Comey and McCabe IRS Audits Under Review by Treasury Watchdog

The Treasury Department’s inspector general will review why two former FBI officials who ran afoul of former President Donald Trump were subjected to rare and detailed tax audits.

The intensive Internal Revenue Service audits of former FBI Director James Comey and Andrew McCabe, the deputy FBI director who later ran the agency after Comey’s firing by Trump, prompted demands for an investigation by top congressional Democrats and Republicans after they were reported Wednesday night by the New York Times.

IRS spokeswoman Jodie Reynolds said that the IRS Commissioner Charles Rettig, who was appointed by Trump, has turned the matter over to the Treasury inspector general for tax administration, and denied that agency officials targeted anyone with the audit program.

“Audits are handled by career civil servants, and the IRS has strong safeguards in place to protect the exam process -- and against politically motivated audits,” Reynolds said in a statement. “It’s ludicrous and untrue to suggest that senior IRS officials somehow targeted specific individuals for National Research Program audits.”

Senate Finance Chair Ron Wyden said that the audits of Comey and McCabe raise “serious concerns.”

“Donald Trump has no respect for the rule of law, so if he tried to subject his political enemies to additional IRS scrutiny that would surprise no one,” Wyden, an Oregon Democrat, said in a statement.

Representative Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said in a statement that “the IRS should never be used as a weapon against political opponents,” adding that he supports examining “all allegations of political targeting.”

Wyden and Brady both said Rettig informed them of the IG probe after the Times report was published on Wednesday evening.

Brady said that Rettig told him he did not communicate with Trump before the audits and that they are randomly generated. Brady also said his own call for an investigation is motivated in part by earlier allegations that conservatives were targeted during former President Barack Obama’s tenure.

White House press secretary Karine Jean-Pierre declined to comment on the audits or whether President Joe Biden had confidence in Rettig.

“His term is up in November, but I don’t have any updates on that,” she said, referring to Rettig. “I’m just going to leave it at that.”

Audits Initiated

The New York Times reported that Comey was informed by the IRS in 2019 that his 2017 tax return would be subjected to an invasive audit, and McCabe was informed his 2019 tax return would receive such an audit. The Times reported that the audits are extremely rare, with just 5,000 of the special audits conducted out of the 153 million individual tax returns filed in 2017.

The Times reported that the audit of the return of Comey and his wife, Patrice Comey, lasted a year and found that they had overpaid their taxes, resulting in a refund of $347. McCabe told the New York Times that the audit of the return filed by him and his wife, Jill McCabe, found that he owed a small amount of money and that they paid it.

Trump indicated his 2017 decision to fire Comey was related to Comey’s work on an investigation into Russia’s interference in the 2016 election. Comey later arranged for a leak of a memo he wrote before the firing about a private meeting with Trump, with the memo stating Trump asked him to end the FBI’s probe of Michael Flynn, the former White House national security adviser.

McCabe was the FBI’s deputy director from 2016 to 2018, but he was acting director in part of 2017 after Comey’s firing. He was fired by then-Attorney General Jeff Sessions about a day before his scheduled retirement after being accused of misleading internal bureau investigators. McCabe has insisted the move was politically motivated.

House Ways and Mean Chair Richard Neal sent a letter to the Treasury inspector general for tax administration on Thursday, saying a full investigation is needed. He said the allegations are evocative of reports in 1971 that then-President Richard Nixon had told top aides he wanted the next IRS commissioner to be someone who would go after his political enemies.

“The possibility that the former President or someone in the White House, his cabinet, his appointees, or leadership working under the Trump-appointed IRS Commissioner may have requested an audit of those deemed disloyal is alarming,” Neal wrote to Inspector General J. Russell George.

Despite the IRS’s denial that neither man was singled out, Representative Bill Pascrell, who chairs the Ways and Means subcommittee on oversight, said he was skeptical and that Rettig should resign immediately.

“There may be no group on the face of this earth that deserves the benefit of the doubt less than Donald Trump and his government enablers,” Pascrell, a New Jersey Democrat, said in a statement. “The IRS under Donald Trump’s handpicked commissioner Charles Rettig has been one catastrophe after another.”

--With assistance from Naomi Jagoda and Justin Sink.

To contact the reporter on this story:
Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editors responsible for this story:
Joe Sobczyk at jsobczyk@bloomberg.net

Megan Scully

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