Comey, McCabe, Objects Of Trump Ire, Were Subjects Of Rare IRS Audits Transcript

Speaker 1: (00:00) How did two of President Trump's top perceive enemies end up facing that kind of audit, the kind of audit that seems designed to dig up any possible dirt? How exactly does that happen? A spokesperson for President Trump said he had, "No knowledge of this", but in a statement to The Times, Comey said, what we were all thinking, "Maybe it's a coincidence, or maybe somebody misused the IRS to get at a political enemy. "Given the role Trump wants to continue to play in our country, we should know the answer to that question". Well that we should. And part of the story that I really don't think we should overlook is how we almost never learned about it. James Comey and Andrew McCabe had worked together for years and neither one knew that the other had been audited like this both after they were fired from the FBI, "Neither man knew that the other had been audited until they were told by a reporter for The Times". That reporter was New York Times, Michael Schmidt. Speaker 1: (00:59) I don't know if there are any other Trump enemies out there that underwent intensive random audits by the IRS. But if there are, and they're listening, please email my next guest Michael Schmidt. Joining us now is Michael. He's the reporter for The New York times who broke this story. Michael, thank you for joining us this evening. We mentioned this particular type of audit is exhaustive and exhausting, but can you just help us understand how much in an audit like this, the IRS asks for and how much work it is to provide all of the material that they need? Michael Schmidt: (01:31) So most audits that the IRS does are set off by an algorithm or a computer that catches something weird in your return. Someone claims a 500,000 square foot home office. There's something weird, something odd that the computer says, Hey, and they send you a letter and they say, Hey, what's going on with this home office? Can you help us clarify that? And you have to explain that individual issue. That's what most audits look like. They're annoying. People don't like them. They see them as invasive, but they're part of the process for the IRS to collect the money that it needs to run the government. A small percentage of audits are done to figure out what the tax gap is. And that's the gap between what Americans do pay in taxes and what they should be paying in taxes. So this is sort of a survey of the country to figure out who isn't paying their taxes and they go out and the IRS says that they randomly pick Americans for this. Michael Schmidt: (02:36) And because they don't know what they're looking for, right, they've randomly picked these Americans, they have to turn over everything in your financial life to recreate your financial year, to determine whether you understated or overstated everything on your taxes. So that means producing receipts. In the case of Comey, there was a question about a printer cartridge he had bought two years earlier that I believe he had taken a write off on and whether he could come up with that receipt, or if there was an Amex statement to back that up. As you were pointing out, Comey had claimed dependence. To show that those dependents existed, that his children actually existed, he had to present the family's Christmas card to the IRS. It took the Comey's 15 months to get through this audit. And it cost them $5,000 in accounting fees, because they had to have an accountant that was going back and forth with the IRS agent who was doing the audit. Speaker 1: (03:43) Yeah. And the interesting thing about these audits is you can't sort of just say, Hey, you're the IRS. You know I have kids. Why don't you handle that? When they ask you for information, you actually have to provide it. The odds of getting selected for one of these random audits is about one in 30,000 and a little bit, according to your article. The odds that both of these men who held the same position back to back in the same administration, both seen as political enemies of the president in charge and the IRS headed by a man that president appointed just makes it seem less than random. Michael Schmidt: (04:18) So we actually don't in the story, lay out what the odds are because we don't know how the IRS actually randomly selects these people, whether it's weighted in a way. All we know is that the IRS says they're trying to get a full picture of what the country looks like. They're trying to get people that are W-2 employees, people that may be making millions of dollars a year. People that may be at the lower end of the economic spectrum. What the numbers we had in the story showed was, is like one out of how many taxpayers was subjected to this. So here were the numbers. For 2017, the year that they looked at Comey's return, there were 5,000 audits of these done on individual taxpayers. So that could be a husband and a wife or partners together. Michael Schmidt: (05:11) So it could be a little bit more than 5,000 people, but out of 150 million returns. So they're randomly picking 5,000 people out of 150 million returns. In 2019, the year that McCabe was audited for, there were 8,000 returns that were selected by the IRS for this out of 153 or 154 million returns that were from that year. So these are very, very low numbers. And what former IRS people that we talked to said is just that, like what are the chances that the people a top of Trump's enemy's list, Speaker 1: (05:51) Yeah. Michael Schmidt: (05:51) People who had overseen some of the most controversial decisions in the FBI's history. Remember a lot of people blame Comey for the election of Hillary Clinton. There's a lot of people that look very negatively on the FBI from this period of time. And these two people were subjected to these audits. Speaker 1: (06:11) Or the defeat of Hillary Clinton. The current IRS commissioner, Charles Rettig, he was appointed to his post by Donald Trump in 2018. Ironically, he had written an oped in Forbes at one point saying that he didn't think it was necessary for Donald Trump to have to provide his personal tax returns. That was before he was appointed. What do we know about him and any potential role that he may have had in the selection of these two men to be part of this random audit? Michael Schmidt: (06:38) Well, the IRS in response to questions from us say that the commissioner plays no role in the selection of this, that he had had no discussions with the White House, any White House about any particular type of audit or law enforcement matter. So they pretty forcefully came back and said that on the record to us and we included that in the story. We know that he is someone that advocated during the 2016 election, that Trump should not release his returns. He is an attorney who had dedicated much of his career to helping people that were fighting with the IRS, often wealthy people that were fighting with the IRS. Michael Schmidt: (07:19) And we do know that Biden allowed him to stay in his position. So when Biden came in, he could have replaced pretty much anyone that he wanted in the executive branch. But I think going along with trying to restore some of the norms, he allowed the FBI director to stay in his position, even though Trump had appointed them. And he allowed commissioner Rettig to stay in at the IRS. His term is schedule to expire at the end of this year, towards the end of this year in the fall. So Biden could have replaced him, but allowed him to stay.