Tax-return whistleblower in spotlight amid impeachment fight

A whistleblower allegation about possible misconduct in the IRS presidential tax-return audit program is receiving new attention amid House Democrats’ impeachment inquiry into President Trump.

House Democrats are focused on a separate whistleblower complaint that President Trump allegedly urged Ukraine to investigate his political rival, former Vice President Joe Biden. But progressive groups are also banging the drum over the tax complaint, urging leaders to disclose more information and arguing it could be crucial to Democrats’ oversight.

“We’ve been overwhelmed with scandal and secrecy with Trump’s presidency the entire time,” said Maura Quint, executive director of the progressive group Tax March. “I think now we’ve got the Democrats trying to hone in on what’s been going on, and I think the common link that we’ve been seeing is that since before he took office, he’s been trying to hide his tax returns.”

{mosads}In an already politically charged Washington, the tax complaint bears the makings of a new political football.

“Obtaining Trump’s tax returns remains vital to determining whether he has manipulated our tax code as much as he has sought to manipulate our democracy,” said Rep. Lloyd Doggett (D-Texas) in a statement Friday. “Whistleblowers regarding possible improper political interference are important to both inquiries.”

The whistleblower complaint though is largely shrouded in mystery, with few public details.

Its existence was first revealed by the Democratic-led House Ways and Means Committee in court documents in August in its lawsuit for Trump’s tax returns. In an Aug. 8 letter to Treasury Secretary Steven Mnuchin included in a filing, Ways and Means Committee Chairman Richard Neal (D-Mass.) said his panel received information from a federal employee on July 29 that included credible allegations of “inappropriate efforts to influence” the IRS mandatory program of auditing presidents and vice presidents.

It’s IRS internal policy, but not law, to conduct annual audits of the president’s and vice president’s tax returns.

A Ways and Means Committee spokeswoman said Friday that the panel can’t discuss the contents of the complaint because of taxpayer privacy laws.

The Washington Post reported Thursday, citing people familiar with the matter, that the whistleblower is an IRS employee who said he was told that at least one Treasury Department political appointee tried to interfere with an audit of Trump or Vice President Pence’s tax returns.

The whistleblower spoke with the Post and wouldn’t say anything about the substance of his complaint but confirmed that he sent it to Neal, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and the Treasury Inspector General for Tax Administration (TIGTA). 

{mossecondads}The Trump administration and the president’s personal lawyers argued in a court filing last week that the Ways and Means Committee hasn’t explained how the whistleblower allegations are related to its demands for the president’s tax returns.

Trump lawyers have filed a motion to dismiss the Ways and Means Committee’s lawsuit, and a hearing on the motion is scheduled for Nov. 6.

Neal has said he’s seeking Trump’s tax returns because of his panel’s interest in oversight and legislative proposals related to the IRS’s audits of presidents.

While the whistleblower complaint’s existence was made public weeks ago, the media coverage of the allegations has intensified after Democrats initiated an impeachment inquiry over the Ukraine complaint.

The allegations about the IRS audit program also came up in a congressional hearing on Sept. 26, after House Speaker Nancy Pelosi’s (D-Calif.) impeachment inquiry announcement. 

During a hearing held by a House Appropriations subcommittee, Rep. Mike Quigley (D-Ill.) asked if TIGTA is investigating any allegations of possible misconduct in the IRS mandatory audit program. The tax administration inspector general, J. Russell George, said TIGTA isn’t conducting any investigation. But deputy inspector general James Jackson acknowledged media reports of a whistleblower, adding “we can’t confirm or deny that we may or may not be doing anything.”

A different Treasury inspector general announced Friday that it is investigating Treasury’s handling of Neal’s request for Trump’s tax returns, in response to a request from the chairman.

The growing interest in the IRS-audit complaint has led to new pressure on Neal. The committee chairman has acted cautiously when it comes to efforts to obtain Trump’s tax returns, at times frustrating progressives.

Ryan Thomas, spokesman for the progressive group Stand Up America, said that “if this whistleblower complaint shows that Donald Trump has unduly influenced the IRS, then Chairman Neal has a duty to expose this blatant act of corruption.”

The campaign for Neal’s Democratic primary challenger, Holyoke, Mass., Mayor Alex Morse, criticized Neal’s handling of the whistleblower complaint.

“The bungled handling of the tax whistleblower is yet another example of Congressman Neal failing to lead on critical opportunities to hold the president accountable,” Morse campaign spokeswoman Gina Christo said in a statement.

Neal’s campaign responded by arguing that Morse wants to distract voters from his mayoral record.

Neal told reporters in late September that whether he releases the whistleblower complaint is “subject to what counsel advises.” He told reporters in Massachusetts last week that his lawyers are trying to interview the whistleblower.

The chairman has also faced criticism from Republicans. Grassley criticized Neal for revealing that the complaint exists before lawyers followed up with whistleblower.

“Whistleblowers face tremendous risk in making their complaints and they need to be reassured that their complaints will be handled seriously and with care,” Grassley said in a statement. “Anyone who receives a whistleblower complaint should also make some effort to evaluate the facts as alleged before going public with such a complaint.”

After the Post reported that Grassley received the complaint in addition to Neal, Senate Finance Committee ranking member Ron Wyden (D-Ore.) called for Grassley to launch a bipartisan effort to investigate the whistleblower’s allegations.

“It would be negligent for the Finance Committee to fail to investigate a whistleblower’s allegations of political interference in the presidential and vice-presidential audit process,” Wyden said on Twitter. “A bipartisan committee effort to get to the bottom of this should have been started months ago.”

How to handle the complaint poses a challenge for Neal.

Legal experts said that one way Neal could release the whistleblower complaint if he wanted would be by reading the complaint’s contents aloud during a committee hearing or on the House floor. That would allow Neal to have protection from liability under the Constitution’s speech or debate clause, the experts said.

But some who support Democrats’ efforts to obtain Trump’s tax returns say there may be good reasons why Neal shouldn’t make the complaint public.

Seth Hanlon, a senior fellow at the Center for American Progress, said that the public doesn’t know enough about the complaint to know whether the complaint’s contents would identify the whistleblower “and therefore whether it would be prudent to release more information.”

Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, said whether Neal “accomplishes anything from releasing more information is unclear.”

Rosenthal said the complaint may not have provided much detail, so Ways and Means Committee staff should talk to the whistleblower before sharing more information. He said it’s unclear why committee staff are moving slowly in conducting the interview.

Hanging over the complaint and its allegations is Neal’s court fight to obtain Trump’s tax returns. Rosenthal added that releasing the complaint might undercut Neal in court.

“I think if Neal simply releases the letter publicly, Neal might look like he’s more interested in publicizing the information than pursuing the information,” Rosenthal said.

“At least that’s what Trump’s lawyers would allege.”