Donald Trump repeatedly attacked James Comey and Andrew G. McCabe, who briefly took over as acting FBI director after Comey was fired. Photo / Doug Mills, The New York Times
The former FBI director and his deputy, both of whom former President Donald Trump wanted prosecuted, were selected for a rare audit programme that the tax agency says is random.
Among tax lawyers, the most invasive type of random audit carried out by the IRS is known, only partly jokingly, as "an autopsy without the benefit of death."
The odds of being selected for that audit in any given year are tiny — out of nearly 153 million individual returns filed for 2017, for example, the IRS targeted about 5,000, or roughly 1 out of 30,600.
One of the few who received a bureaucratic letter with the news that his 2017 return would be under intensive scrutiny was James Comey, who had been fired as FBI director that year by President Donald Trump. Furious over what he saw as Comey's lack of loyalty and his pursuit of the Russia investigation, Trump had continued to rail against him even after his dismissal, accusing him of treason, calling for his prosecution and publicly complaining about the money Comey received for a book after his dismissal.
Comey was informed of the audit in 2019. Two years later, the IRS, still under the leadership of a Trump appointee after President Joe Biden took office, picked about 8,000 returns for the same type of audit Comey had undergone from the 154 million individual returns filed in 2019, or about 1 in 19,250.
Among those who were chosen to have their 2019 returns scrutinised was the man who had been Comey's deputy at the bureau: Andrew McCabe, who served several months as acting FBI director after Comey's firing.
McCabe was later dismissed by the Trump Justice Department after its watchdog accused him of misleading internal FBI investigators. Like Comey, he had come to be perceived as an enemy by Trump, who assailed him, accused him of treason and raised questions about his finances long after pushing for his dismissal and prosecution, a pattern that continued even after Trump lost the 2020 election and began trying to overturn the results.
Comey and McCabe — whose spouses were also audited because both couples filed joint returns — provided the letters initiating their audits to The New York Times. Comey provided the Times with a privacy release allowing the IRS to respond to a Freedom of Information Act request about his case. Neither man knew that the other had been audited until they were told by a reporter for the Times.
The minuscule chances of the two highest-ranking FBI officials — who made some of the most politically consequential law enforcement decisions in a generation — being randomly subjected to a detailed scrub of their tax returns a few years after leaving their posts presents extraordinary questions.
How taxpayers get selected for the program of intensive audits — known as the National Research Program — is closely held. The IRS is prohibited by law from discussing specific cases, further walling off from scrutiny the type of audit Comey and McCabe faced.
IRS Commissioner Chuck Rettig, who was appointed to the post by Trump in 2018, declined to be interviewed about the audits, discussions he may have had with Trump or his political appointees, or how compliance research examinations work. But in a written statement, the agency said he had no role in selecting candidates for audit.
Asked about the audits, Trump, through a spokesperson, said, "I have no knowledge of this." He went on to point to reports from the Justice Department's inspector general that were critical of Comey and McCabe.
Former IRS officials and tax lawyers said that given the array of reforms imposed on the agency after the Watergate scandal, they believed it would be difficult for a president or an appointee to direct an audit at a political opponent.
But the officials and lawyers said that because Trump repeatedly tried to use the powers of the federal government against his rivals and to overturn the election, and because the IRS conducted an extensive audit on two people whom he routinely pushed to have prosecuted, the tax inspector general or Congress should investigate the circumstances.
Comey's audit, which lasted more than a year, revealed that he and his wife, Patrice Comey, had overpaid their 2017 federal income taxes. They received a US$347 refund.
McCabe said that his audit determined that he and his wife, Jill McCabe, owed the federal government a small amount of money, which they paid. He said he now believes the audit has concluded.
"The revenue agent I dealt with was professional and responsive," McCabe said. "Nevertheless, I have significant questions about how or why I was selected for this."
The audits conducted on Comey, McCabe and their spouses, according to the letters they received from the agency, were carried out under an IRS research program to learn who is — and who is not — paying their taxes.
In many instances, the agency catches taxpayers who undergo the audits understating their incomes and overstating their deductions, forcing them to pay penalties and interest. Even if a person has done nothing wrong, the process can take months and cost thousands of dollars in accountant fees.
In the case of the Comeys, it cost US$5,000 in accountant fees. The IRS agent conducting the audit spent at least 50 working hours on it, including meeting face to face with the family's accountant, who drove several hours to meet the agent, according to internal IRS documents produced in response to a Freedom of Information Act request filed by The Times.
Along with having to produce all of his personal financial information, such as brokerage and bank statements, Comey gave the IRS a copy of his family's Christmas card that had a photograph to prove that he had the children he had claimed as dependents.
Comey and McCabe generated ire across partisan lines during their tumultuous tenures at the FBI. Along with being atop Trump's list of enemies, Comey in particular was blamed by many Hillary Clinton supporters for the election of Trump because of how he handled the investigation of her emails during the 2016 election.
The type of audit that the Comeys and McCabes faced was devised to select taxpayers through a statistical software program that groups them by certain undisclosed factors. The system "does not entail employees manually selecting individuals for examination," the agency said.
It is illegal under federal law for anyone in the executive branch — with a few narrow exceptions — to request that the IRS conduct an audit or an investigation of someone's taxes. Any IRS employee receiving such a request is required to report it to the Treasury Department's inspector general for tax administration. Those caught violating the law can be sentenced to up to five years in prison.
In the days after Comey was fired in May 2017, McCabe took over as acting FBI director and opened investigations into whether Trump had obstructed justice in firing Comey and whether the president, because of his ties to Russia, was a counterintelligence threat to the United States.
The Justice Department in 2018 fired McCabe and took away his pension, a move that Trump applauded. The department conducted a wide-ranging investigation into McCabe after his firing.
His audit focused on his 2019 return. That year, with McCabe still a regular target of criticism from Trump, Justice Department prosecutors told 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 Garland became attorney general last year in the early months of the Biden administration, Justice Department lawyers began negotiations with 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 McCabe's pension and cleansing his personnel record of his firing. Around that time he received the letter from the IRS beginning the audit. Last month, McCabe was told it had been completed.
This article originally appeared in The New York Times.
Written by: Michael S. Schmidt
Photographs by: Jared Soares, T.J. Kirkpatrick, Stefani Reynolds, Ryan Christopher Jones and Doug Mills
© 2022 THE NEW YORK TIMES
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