Charles Rettig was barely 24 hours into his new job as President Donald Trump’s hand-picked chief tax official when a bombshell news report hit, alleging shady tax dealings by Trump and his family roughly 20 years ago.
With New York state and city officials now saying they’ll examine allegations raised by the New York Times, Rettig -- who built a reputation as a tough tax litigator in private practice -- risks incurring Trump’s wrath if he chooses to follow suit, according to tax lawyers and veterans of the Internal Revenue Service.
“Look what happened to Sessions when he wouldn’t block the Russian investigation,” said David Klasing, a California-based tax litigator and accountant. He was referring to Attorney General Jeff Sessions, who recused himself from overseeing Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 election -- and has been lambasted by Trump on Twitter ever since.
On Tuesday, Trump focused his ire on the Times, calling its article a “hit piece” that was “very old” and “boring.” White House Press Secretary Sarah Huckabee Sanders has said that “many decades ago, the IRS reviewed and signed off on these transactions.”
An IRS spokesman didn’t respond to a request for comment. Tax lawyers say that while the statute of limitations might bar the IRS from pursuing any criminal charges related to the details alleged in the Times story, the agency could levy civil penalties totaling hundreds of millions of dollars -- if it proved that the Trumps pursued strategies they knew to be illegal.
But that’s a big “if.” One problem for investigators would be getting access to records that are about two decades old.
‘Good Luck’
“The IRS has a real problem with record keeping, so good luck with that,” said attorney Beth Shapiro Kaufman of Caplin & Drysdale in Washington. If records aren’t available in agency files, IRS examiners would “have to do some sleuthing,” said Anne O’Brien, also a partner at the firm. Regardless, Kaufman said, it’s probably a longshot for Rettig’s agency to get involved.
“He started the job on Monday, and he’s going to decide on Wednesday that he’s going to audit the president?” she said. “That seems unlikely.”
In truth, Trump’s income tax returns have been under audit for years; he cited the ongoing audit as his reason for breaking with roughly four decades of political tradition when he refused to release any returns during the 2016 campaign. As president, his returns are now routinely audited by federal law.