The top lawyer at the Internal Revenue Service (IRS), the United States’ federal tax collection agency, is set to resign amid rumors of a clash with President Donald Trump’s White House.
Ken Kies has served as Deputy Chief Counsel for the IRS and Assistant Secretary for Taxation at the U.S. Treasury.
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But this week, reports emerged that he would resign from his position at the Internal Revenue Service following recent signs of turmoil within the Trump administration.
On Friday, news outlets including Reuters and the Wall Street Journal reported that Mr. Keith had been “forced out” of his role, citing anonymous sources familiar with the situation.
Keyes reportedly warned Trump administration officials not to issue orders to the Internal Revenue Service regarding tax audits.
The Internal Revenue Code prohibits the president, vice president, and senior employees of their offices from requesting the IRS to “conduct or complete an audit or other investigation of a particular taxpayer.”
Even with the White House’s request, it is unclear what sparked the conflict.
But the law was enacted to ensure that the president and his allies do not use tax audits as a political tool against perceived rivals.
This kind of situation has happened in the past. For example, former President Richard Nixon sought to install a “ruthless” Commissioner of Internal Revenue who would “go after his enemies, not his friends.”
These kinds of statements eventually became part of a body of evidence introduced in the impeachment proceedings against Mr. Nixon, which forced his resignation in 1974.
Trump is also under intense scrutiny over accusations that he tried to use the Internal Revenue Service for personal gain.
Since taking office for a second term, Republican leaders have threatened to revoke Harvard’s tax-exempt status as part of a feud with the university over its handling of pro-Palestinian protests and admissions practices.
President Trump also filed a personal lawsuit against the IRS in January, accusing him of leaking his 2017 tax returns to an outside contractor.
These tax returns have been the subject of intense media scrutiny, including a 2019 New York Times report. Despite criticism that his lawsuit was outside the statute of limitations and represented a serious conflict of interest, Trump sought $10 billion in damages from the IRS.
After all, the IRS is under President Trump’s authority as part of the executive branch, as is the Department of Justice (DOJ), which represented the tax agency in this case.
Critics called the case an unprecedented example of a sitting president suing his own government.
In May, the Justice Department announced an out-of-court settlement that granted Trump and his family immunity from IRS tax audits. It would also create a $1.8 billion “anti-weaponization fund” to compensate those deemed harmed by the government’s unfair prosecution.
But that settlement was struck down last week by U.S. District Judge Kathleen Williams in South Florida.
She accused the Justice Department of “abdicating its responsibility to zealously protect America’s interests” and called the settlement an example of government self-dealing.
In relation to the argument that the IRS can no longer audit Mr. Trump or his family, Mr. Williams cited Section 7217 of the Internal Revenue Code, which prohibits executive intervention in audits.
“To acquiesce in such requests is wholly inconsistent with the duties of Justice Department attorneys (and IRS CEO Bisignano) to enforce the law and protect the public interest,” Williams wrote.
According to media reports, Mr. Keith has refused to work on the controversial IRS settlement.
Reuters also suggested that Mr. Keyes differs from the Trump administration on issues such as high taxes, including tax breaks for landowners who restrict the development of their land.
Former Treasury general counsel Brian Morrissey reportedly resigned in May over the settlement.
Before joining the Trump administration, Keyes worked as Trump’s personal tax attorney.
