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 Calfornia-based tax litigator and accountant. He was referring to Attorney General Jeff Sessions, who recused himself from the inquiry — and has been lambasted by Trump on Twitter ever since.
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 illegal strategies.
But that’s a big “if.” One problem for investigators would be getting access to records that are about two decades old.
“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 long shot 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.”
Democrats in Congress are calling anew for the public release of his returns.
“It is imperative that the IRS fully investigate these allegations,” said Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, in a letter to Rettig on Wednesday. Sen. Orrin Hatch, R-Utah, chairman of the Finance panel, said Wednesday that he hadn’t read the Times report but added that Trump “may have to give up those returns, I don’t know.”
“If I was him, I wouldn’t want to give them up,” Hatch said.