House panel says IRS failed to audit Trump in first two years of presidency

Democrats on the House tax-writing committee are faulting the IRS for failing to conduct a mandatory audit of President Donald Trump’s tax returns during the first two years of his term.

House Ways and Means Committee Chairman Richard Neal said the IRS did not begin to audit returns from 2017 until the 2019 date on which the committee requested Mr. Trump’s returns.

“We know now, the first mandatory audit was opened two years into his presidency. On the same day this committee requested his returns,” said Mr. Neal, Massachusetts Democrat. “We anticipated the IRS would expand the mandatory audit program to account for the complex nature of the former president’s financial situation yet found no evidence of that. This is a major failure of the IRS under the prior administration, and certainly not what we had hoped to find.”

His focus on the mandatory audit system is just the opening chapter of a saga that will unfold over the coming days. The committee is scrubbing sensitive information from Mr. Trump’s 2015-2020 tax returns before making them public.

Mr. Trump broke with longstanding precedent by refusing to release his tax returns when he ran for the presidency in 2016.

Democrats accused him of hiding something, and committee reports and articles by The New York Times showed he reported negative income that allowed him to pay little or no federal taxes for a period before receiving positive income in 2018 and paying nearly $1 million to Uncle Sam.

Mr. Neal’s pursuit of Mr. Trump’s tax returns under a mechanism that says the IRS “shall” furnish the records to Congress kicked off a long-running debate and court battle. Last month, the Supreme Court declined to block the release of the returns.

Republicans said Democrats were on a fishing expedition for political purposes and are setting a dangerous precedent in demanding a person’s returns.

Mr. Trump is running for president again, so the information in the returns could impact his 2024 campaign.

The former president, who frequently describes Democrats’ investigations as political witch hunts, also faces a New York-based civil probe of his family business.

For now, Democrats are characterizing the effort as an attempt to understand whether IRS processes are working as intended.

Mr. Neal said when it sought an explanation, the IRS said it lacked the personnel needed to audit Mr. Trump’s documents.

Democratic leaders said lawmakers should pass legislation that ensures timely audits of presidents.

Senate Finance Committee Chairman Ron Wyden said the revenue agency might have been afraid to audit a sitting president.

“There is no justification for the failure to conduct the required presidential audits until a congressional inquiry was made,” Mr. Wyden, Oregon Democrat, said. “I have additional questions about the extent to which resource issues or fear of political retaliation from the White House contributed to lapses here.”

Democratic leaders said lawmakers should pass legislation that ensures timely audits of presidents.

“The Ways and Means Committee’s solemn oversight work has revealed the urgent need for legislation to ensure the public can trust in real accountability and transparency during the audit of a sitting president’s tax returns — not only in the case of President Trump but for any president,” House Speaker Nancy Pelosi said. “The American people deserve to know without question that no one is above the law.”