Top IRS lawyer to resign post amid disagreements with Trump administration 

The top lawyer for the Internal Revenue Service (IRS), the federal tax-collecting agency in the United States, is scheduled to leave his post amid rumours of clashes with President Donald Trump’s White House.

Ken Kies has served as acting chief counsel to the IRS, as well as an assistant secretary for tax policy to the US Treasury.

But this week, reports emerged that he was leaving his post at the IRS, in the latest sign of turmoil in the Trump administration.

On Friday, news outlets including Reuters and The Wall Street Journal described Kies as being “forced out” of his role, citing anonymous sources familiar with the situation.

Kies had reportedly warned members of the Trump administration against giving orders to the IRS about tax audits.

The Internal Revenue Code prohibits the president, vice president and any executive employees in their offices from requesting that the IRS “conduct or terminate an audit or other investigation of any particular taxpayer”.

It is unclear what, if any, White House request might have spurred the conflict.

But the law is in place to ensure that the president and his allies do not leverage tax audits as a political tool against perceived rivals.

Such circumstances have arisen in the past. Former President Richard Nixon, for instance, sought to install a “ruthless” IRS head who would “go after our enemies and not go after our friends”.

Those kinds of remarks would eventually be part of the body of evidence presented at Nixon’s impeachment proceedings, which led him to resign in 1974.

Trump has also faced scrutiny for accusations that he, too, has attempted to wield the IRS for personal gain.

Since taking office for a second term, the Republican leader has threatened to strip Harvard University of its tax-exempt status, as part of a feud with the school over its response to pro-Palestinian protests and admissions practices.

Trump also filed a personal lawsuit against the IRS in January, over allegations that it was responsible for an outside contractor who leaked his tax returns in 2017.

Those tax returns became the subject of intense media scrutiny, including coverage in The New York Times in 2019. Trump sought $10bn in damages from the IRS, despite criticisms that his suit fell outside the statute of limitations and represented a major conflict of interest.

The IRS, after all, falls under Trump’s authority as part of the executive branch, as does the Department of Justice (DOJ), which represented the tax agency in the case.

Critics described the case as an unprecedented instance of a sitting president suing his own government.

In May, the Justice Department announced an out-of-court settlement that would have given Trump and his family immunity from IRS tax audits. It would have also created a $1.8bn “anti-weaponisation fund” to compensate those deemed to have suffered from unfair government prosecution.

That settlement, however, was struck down last week by US District Judge Kathleen Williams in south Florida.

She accused the Justice Department of “abdicating its responsibility to zealously defend the interests of the United States” and described the settlement as a case of government self-dealing.

In reference to the claim that the IRS could no longer audit Trump or his family, Williams cited the Internal Revenue Code’s Section 7217, which bars executive interference in audits.

“Acquiescing to any such demand is wholly incompatible with the duties of DOJ attorneys (as well as CEO Bisignano for the IRS) to enforce the law and protect the public interest,” Williams wrote.

Media reports indicate that Kies had refused to work on the controversial IRS settlement.

Reuters also indicated that Kies differed from the Trump administration over issues like high-value taxes, including tax breaks for landowners who limit development on their land.

The Treasury’s former general counsel, Brian Morrissey, reportedly resigned in May over the settlement deal.

Kies had previously worked as a personal tax lawyer to Trump before joining his administration.