Donald Trump Somehow Avoided a Mandatory IRS Tax Audit For Two Years as President

Donald Trump did not pay any federal taxes in 2020 and did not undergo a mandatory Internal Revenue Service audit for his first two years in the White House, according to a report the House Ways and Means Committee released Tuesday, as the panel prepared to make the former president’s tax records public. The report, which came after a lengthy battle to obtain Trump’s tightly-guarded financial information, opens up new avenues of potential legal vulnerability for the former president — and has already prompted calls for legislation to help the IRS work toward “restoring its integrity.”

“The evidence is clear,” Ways and Means Chair Richard Neal said in a statement Tuesday, before the committee voted along party lines to make Trump’s tax information public. “Congress must step in.” 

Under longstanding IRS policy, both the president and vice president are subject to automatic tax audits every year. But according to the committee, the program was “dormant” during Trump’s presidency; his returns were not audited in 2017 or 2018, and the IRS only notified him that his 2015 taxes would be audited on April 3, 2019 — the same day Neal requested his returns. “This is a major failure of the IRS under the prior administration, and certainly not what we had hoped to find,” Neal said in his statement Tuesday, calling for Congress to codify the yearly presidential tax audits into federal law. House Speaker Nancy Pelosi vowed in a statement that she will “move swiftly” to pass Neal’s proposed legislation in the final days of the Democrats’ control of the House: “The American people deserve to know without question that no one is above the law,” Pelosi said. 

Democrats on the Ways and Means Committee will also release six years of Trump’s tax records in the coming days, after redacting the documents of sensitive information. But the panel’s report Tuesday already contained some significant revelations: Despite reporting tens of millions in income, he paid only $750 in 2016 and 2017 and nothing in 2020, citing business losses. He paid $641,931 in 2015, $999,466 in 2018, and $133,445 in 2019. That tracks with a 2020 New York Times report, which revealed that Trump had not paid income taxes for 10 of the last 15 years and detailed his decades of tax avoidance, often through shady means. (An earlier Times investigation found instances of what appeared to be “outright fraud” in his tax practices.)

Trump has long sought to keep his financial information from the public; he broke with decades of tradition when he refused to release his tax returns during his run for office, lying that he could not do so because he was under audit. “I don’t mind releasing,” he said in 2016. “I’m under a routine audit, and it’ll be released.” 

He never did release those “big” and “beautiful” returns, and fought to prevent Congress from obtaining them, insisting congressional investigators were trying to hurt him politically. But Neal’s committee successfully secured the records last month after the Supreme Court declined to intervene on Trump’s behalf, and voted Tuesday to make the records from 2015-2020 public. That is sure to invite intense scrutiny into Trump’s practices, which he has attempted to avoid for years. It may also put the IRS under the microscope, and into its leaders under Trump. Charles Rettig, who Trump appointed in 2018, had previously defended Trump’s decision not to release his taxes during the 2016 campaign. John Koskinen, an Obama appointee who ran the agency for the first year of Trump’s presidency, told the Times that he did not know why the presidential audit had not been conducted: “It does seem to me to be a legitimate question,” Koskinen said. “If the IRS had the responsibility and wasn’t auditing, what’s the explanation?”

Democrats suggested that question was top of mind Tuesday as they voted to release Trump’s taxes. “This is bigger than one crooked man,” Representative Bill Pascrell said after the vote. But Republicans, who take over the chamber next month, have accused them of playing politics, with Kevin Brady, the ranking member of the Ways and Means Committee, claiming that Democrats were unleashing “a cycle of political retribution” in Congress. Neal pushed back on Brady’s warning, saying that while “weight of our job is heavy,” it was necessary to “ensure our tax laws are administered fairly and without preference.” The facts are “damning,” he said. “This isn’t the type of abuse I want for our tax code.” 

All this comes during a particularly bad stretch for Trump: He is under investigation for his handling of classified materials; his family business was convicted on tax fraud charges; and the January 6 committee this week recommended the Justice Department prosecute him on four counts: obstruction of an official proceeding of the United States government, conspiracy to defraud the U.S., conspiracy to make a false statement, and inciting, assisting, or aiding and comforting an insurrection.