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Comey and McCabe, Who Infuriated Trump, Each Faced Intensive I.R.S. Audits


Amongst tax lawyers, probably the most invasive form of random audit carried out by the I.R.S. is understood, only partly jokingly, as “an autopsy without the good thing about death.”

The chances of being chosen for that audit in any given 12 months are tiny — out of nearly 153 million individual returns filed for 2017, for instance, the I.R.S. targeted about 5,000, or roughly one out of 30,600.

Considered one of the few who received a bureaucratic letter with the news that his 2017 return could be under intensive scrutiny was James B. Comey, who had been fired as F.B.I. director that 12 months by President Donald J. Trump. Furious over what he saw as Mr. Comey’s lack of loyalty and his pursuit of the Russia investigation, Mr. Trump had continued to rail against him even after his dismissal, accusing him of treason, calling for his prosecution and publicly complaining in regards to the money Mr. Comey received for a book after his dismissal.

Mr. Comey was informed of the audit in 2019. Two years later, the I.R.S., still under the leadership of a Trump appointee after President Biden took office, picked about 8,000 returns for a similar form of audit Mr. Comey had undergone from the 154 million individual returns filed in 2019, or about one in 19,250.

Amongst those that were chosen to have their 2019 returns scrutinized was the person who had been Mr. Comey’s deputy on the bureau: Andrew G. McCabe, who served several months as acting F.B.I. director after Mr. Comey’s firing.

Mr. McCabe was later dismissed by the Trump Justice Department after its watchdog accused him of misleading internal F.B.I. investigators. Like Mr. Comey, he had come to be perceived as an enemy by Mr. Trump, who assailed him, accused him of treason and raised questions on his funds long after pushing for his dismissal and prosecution, a pattern that continued even after Mr. Trump lost the 2020 election and started attempting to overturn the outcomes.

Mr. Comey and Mr. McCabe — whose spouses were also audited because each couples filed joint returns — provided the letters initiating their audits to The Latest York Times. Mr. Comey provided The Times with a privacy release allowing the I.R.S. to answer a Freedom of Information Act request about his case. Neither man knew that the opposite had been audited until they were told by a reporter for The Times.

The minuscule possibilities of the 2 highest-ranking F.B.I. officials — who made a few of the most politically consequential law enforcement decisions in a generation — being randomly subjected to an in depth scrub of their tax returns just a few years after leaving their posts presents extraordinary questions.

Was it sheer coincidence that two close associates would randomly come under the scrutiny of the identical audit program inside two years of one another? Did something of their returns increase the possibilities of their being chosen? Could the audits have been connected to criminal investigations pursued by the Trump Justice Department against each men, neither of whom was ever charged?

Or did someone within the federal government or on the I.R.S. — an agency that at times, like under the Nixon administration, was used for political purposes but says it has imposed a spread of internal controls intended to thwart anyone from improperly using its powers — corrupt the method?

“Lightning strikes, and that’s unusual, and that’s what it’s like being picked for certainly one of these audits,” said John A. Koskinen, the I.R.S. commissioner from 2013 to 2017. “The query is: Does lightning then strike again in the identical area? Does it occur? Some people might even see that of their lives, but most won’t — so that you don’t have to be an anti-Trumper to take a look at this and think it’s suspicious.”

How taxpayers get chosen for this system of intensive audits — generally known as the National Research Program — is closely held. The I.R.S. is prohibited by law from discussing specific cases, further walling off from scrutiny the form of audit Mr. Comey and Mr. McCabe faced.

The I.R.S. commissioner, Charles P. Rettig, who was appointed to the post by Mr. Trump in 2018, declined to be interviewed in regards to the audits, discussions he can have had with Mr. Trump or his political appointees, or how compliance research examinations work. But in a written statement, the agency said he had no role in choosing candidates for audit.

“Commissioner Rettig just isn’t involved in individual audits or taxpayer cases; those are handled by profession civil servants,” the statement said. “As I.R.S. commissioner, he has never been in touch with the White House — in either administration — on I.R.S. enforcement or individual taxpayer matters. He has been committed to running the I.R.S. in an impartial, unbiased manner from top to bottom.”

Pressed on whether the I.R.S. would look into the questions raised by the Comey and McCabe audits, the agency noted in its statement — without referring specifically to their cases — that each time it learns of allegations of wrongdoing, it reaches out to the inspector general for tax administration within the Treasury Department “for further review.”

Asked in regards to the audits, Mr. Trump, through a spokeswoman, said, “I don’t have any knowledge of this.” He went on to point to reports from the Justice Department’s inspector general that were critical of Mr. Comey and Mr. McCabe.

Former I.R.S. officials and tax lawyers said that given the array of reforms imposed on the agency after the Watergate scandal, they believed it might be difficult for a president or an appointee to direct an audit at a political opponent.

However the officials and lawyers said that because Mr. Trump repeatedly tried to make use of the powers of the federal government against his rivals and to overturn the election, and since the I.R.S. conducted an in depth audit on two people whom he routinely pushed to have prosecuted, the tax inspector general or Congress should investigate the circumstances.

Mr. Comey’s audit, which lasted over a 12 months, revealed that he and his wife, Patrice Comey, had overpaid their 2017 federal income taxes. They received a $347 refund.

“I don’t know whether anything improper happened, but after learning how unusual this audit was and the way badly Trump desired to hurt me during that point, it made sense to attempt to figure it out,” Mr. Comey said in an announcement. “Possibly it’s a coincidence or perhaps anyone misused the I.R.S. to get at a political enemy. Given the role Trump desires to proceed to play in our country, we must always know the reply to that query.”

Mr. McCabe said that his audit determined that he and his wife, Jill McCabe, owed the federal government a small amount of cash, which they paid. He said he now believed the audit had concluded.

“The revenue agent I handled was skilled and responsive,” Mr. McCabe said. “Nevertheless, I even have significant questions on how or why I used to be chosen for this.”

The audits conducted on Mr. Comey, Mr. McCabe and their spouses, in line with the letters they received from the agency, were carried out under an I.R.S. research program to learn who’s — and who just isn’t — paying their taxes.

The agency uses these “compliance research examinations” to find out the tax gap and adjust its dragnets, including a closely guarded formula that is meant to catch tax cheats. The variety of audits carried out declined starting with returns for 2015 due to budget strains before turning up somewhat in 2018 and 2019, probably the most recent years for which figures can be found.

“Your federal income tax return for the 12 months shown above was chosen at random for a compliance research examination,” the letters to each the Comeys and the McCabes said. “We must examine randomly chosen tax returns to raised understand tax compliance and improve fairness of the tax system. We’ll offer you the chance to clarify any errors we may find through the examination.”

In lots of instances, the agency catches taxpayers who undergo the audits understating their incomes and overstating their deductions, forcing them to pay penalties and interest. Even when an individual has done nothing improper, the method can take months and price hundreds of dollars in accountant fees.

Unlike a typical audit that asks individuals to clarify a selected a part of their taxes, these audits comb through the complete return, forcing taxpayers in some cases to go to great lengths to essentially recreate their funds for the 12 months in query.

Those being audited are sometimes forced to provide bank records, copies of checks, receipts and letters documenting donations to find out whether or not they are properly reporting income and expenses and are usually not hiding assets.

Within the case of the Comeys, it cost $5,000 in accountant fees. The I.R.S. agent conducting the audit spent not less than 50 working hours on it, including meeting nose to nose with the family’s accountant, who drove several hours to fulfill the agent, in line with internal I.R.S. documents produced in response to a Freedom of Information Act request filed by The Times.

Together with having to provide all of his personal financial information, like brokerage and bank statements, Mr. Comey gave the I.R.S. a duplicate of his family’s Christmas card that had a photograph to prove that he had the youngsters he had claimed as dependents.

The audit went so deeply into his funds that his accountant had a forwards and backwards with the agency about how much the Comeys had spent on office supplies purchased greater than two years earlier. In a series of documents the accountant provided to the I.R.S. in February 2020, the accountant said that Mr. Comey, originally going by memory, had provided far too low an estimate about how much he had spent on them.

“I even have attached an invoice to support the fee of the MacBook Air for $1,761,” Mr. Comey’s accountant wrote to the agent in a letter. “He also bought a printer and toner, charged on his AMX, 9/29/17. Mr. Comey has requested a duplicate of the statement for that month. I may also fax that document to you, after I get it.”

A month later, Mr. Comey’s accountant pushed back on the invasiveness of the audit, likening it to a federal investigation.

“We had an extended conversation,” the agent wrote in her notes in regards to the call. “He said he couldn’t understand this audit, and that is how a fraud case is audited. He also couldn’t understand why I requested all bank statements.”

The Trump Investigations

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Quite a few inquiries. Since Donald J. Trump left office, the previous president has been facing civil and criminal investigations across the country into his business dealings and political activities. Here’s a take a look at the notable inquiries:

Westchester County criminal investigation. The district attorney’s office in Westchester County, N.Y., appears to be focused not less than partly on whether the Trump Organization misled local officials in regards to the value of a golf course, Trump National Golf Club Westchester, to scale back its taxes.

The agent said that she explained to the accountant that this was how the audits were conducted if someone like Mr. Comey, who had business expenses, didn’t keep formal books.

Mr. Comey and Mr. McCabe generated ire across partisan lines during their tumultuous tenures on the F.B.I. Together with being atop Mr. Trump’s list of enemies, Mr. Comey specifically was blamed by many Hillary Clinton supporters for the election of Mr. Trump due to how he handled the investigation of her emails through the 2016 election.

The form of audit that the Comeys and McCabes faced was devised to pick out taxpayers through a statistical software program that groups them by certain undisclosed aspects. The system “doesn’t entail employees manually choosing individuals for examination,” the agency said.

It’s illegal under federal law for anyone in the chief branch — with just a few narrow exceptions — to request that the I.R.S. conduct an audit or an investigation of somebody’s taxes. Any I.R.S. worker receiving such a request is required to report it to the Treasury Department’s inspector general for tax administration. Those caught violating the law might be sentenced to as much as five years in prison.

Mr. Trump, as president, attacked Mr. Comey commonly, calling him a “dirty cop” who “needs to be tried for treason” and “needs to be arrested on the spot!”

He similarly attacked Mr. McCabe, including accusing him of treason. A 12 months before Mr. McCabe’s audit began, Mr. Trump, while still president, publicly asked about Mr. McCabe’s funds, repeating a longstanding false claim about donations that his wife had received when she ran for Virginia State Senate.

“Was Andy McCabe ever forced to pay back the $700,000 illegally given to him and his wife, for his wife’s political campaign, by Crooked Hillary Clinton while Hillary was under FBI investigation, and McCabe was the top of the FBI??? Just askin’?” Mr. Trump tweeted in September 2020.

At a minimum, some lawyers said, Mr. Trump’s public statements about Mr. Comey and Mr. McCabe, and the undeniable fact that the person Mr. Trump appointed to the I.R.S. was running it on the time of the audits, could create a perception that the I.R.S. might need been used to perform a political vendetta.

“When something like that happens, the president’s involvement inevitably casts a shadow over an otherwise routine government function and harms the general public’s confidence within the fair administration of taxes,” said Scott D. Michel, a longtime lawyer who makes a speciality of tax disputes.

The audit of the Comeys began in November 2019. The audit of the McCabes began in October 2021, nine months after Mr. Trump left office. On the time each audits occurred, the I.R.S. was run by Mr. Rettig, whom Mr. Biden has allowed to remain on for a term set to run out in November.

Throughout the 2016 election, Mr. Rettig, a Los Angeles-based tax lawyer, said that because Mr. Trump was under audit, he should “absolutely not” release his tax returns.

The I.R.S. audit of the Comeys’ 2017 return began in 2019, three months after Mr. Trump blew up at his attorney general on the time, William P. Barr, over his decision to not charge Mr. Comey with a criminal offense for a way he handled memos that Mr. Comey kept on his interactions with the president. Mr. Comey had signed a lucrative book deal in 2017.

In the course of Mr. Comey’s audit, in January 2020, it was publicly disclosed that he and a longtime friend and adviser, Daniel C. Richman, were under investigation by the Justice Department on suspicion of leaking information related to Mr. Comey’s decision making within the investigation of Mrs. Clinton.

Prosecutors were focused on whether the 2 men had provided classified information to reporters as they tried to supply a rationale for why Mr. Comey held a news conference to announce the conclusion of the investigation into Mrs. Clinton’s use of a private email account. The investigation of Mr. Comey and Mr. Richman was closed without anyone being charged.

In the times after Mr. Comey was fired in May 2017, Mr. McCabe took over as acting F.B.I. director and opened investigations into whether Mr. Trump had obstructed justice in firing Mr. Comey and whether the president, due to his ties to Russia, was a counterintelligence threat to the US.

The Justice Department in 2018 fired Mr. McCabe and took away his pension, a move that Mr. Trump applauded. The department conducted a wide-ranging investigation into Mr. McCabe after his firing.

His audit focused on his 2019 return. That 12 months, with Mr. McCabe still an everyday goal of criticism from Mr. Trump, Justice Department prosecutors told Mr. McCabe’s lawyers that they planned to ask a grand jury to indict him, claiming he had made false statements to internal bureau investigators.

Despite presenting evidence to the grand jury, no charges were ever filed, leading some legal experts to conclude that the grand jury had made the rare move of deciding that there was no basis to charge him.

Shortly after Merrick B. Garland became attorney general last 12 months within the early months of the Biden administration, Justice Department lawyers began negotiations with Mr. McCabe’s lawyers to resolve a lawsuit he had brought against the department, claiming that his firing was retaliatory and politically motivated.

In October 2021, the department settled, reinstating Mr. McCabe’s pension and cleansing his personnel record of his firing. Around that point he received the letter from the I.R.S. starting the audit. Last month, Mr. McCabe was told it had been accomplished.

Reporting was contributed by Kirsten Noyes, Matthew Cullen, Adam Goldman and Kitty Bennett.

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