Audit fight brewing for President, Vice President

 News & Commentary by Anthony E. Parent, Esq.

For those disappointed with the result of the 2012 Presidential election, take heart. My inside information at the IRS confirms a bit of schadenfreud for you. I am told that both Barack Obama and Joe Biden will be facing an income tax audit for their 2012 individual 1040 tax returns. If you are wondering just what triggered this audit, and a proposal for who else should be audited, then read on.

President Obama is facing one of the scariest prospects in 2013: an IRS audit

The scandal of 2013?

Trust me on this. I am 100% confident that  Obama and Biden will be facing the pain and discomfort of a tax audit. And who just knows what the IRS will uncover.  Undisclosed foreign accounts? Unreported income?  The results could prove scandalous. 

So what triggered the audit on both the president and vice-president? A whistle-blower report? Was it Darrell Issa’s House oversight committee?

The answer is none of the above.

I was hoping I could keep my source confidential, but in the interest of public discourse, I feel compelled to disclose how I came across this information.

My “inside” source is something called the “Internal” Revenue Manual (IRM) 4.2.1.8 which states: 

 ”Individual income tax returns for the President and Vice President will be subject to mandatory examinations.”

In IRS-speak ,an “examination” is an tax audit.

So yeah, this is kind of a tease. The two are facing an audit because of their position they hold, not who they are. If the election when the other way, Mitt Romney and Paul Ryan would be facing an audit. (or the other, other way, then Libertarian President Gary Johnson and VP Jim Gray would be facing the scrutiny of the IRS).

Presidents and Vice-Presidents are audited every year as a matter of course (but truth be told, you probably didn’t know that).

Why the need for secrecy?

 And we if look at this IRM section we see this as well:

“After processing, the income tax returns will be forwarded (in double sealed envelopes) to the Deputy Commissioner Operations OP. (See IRM 3.28.3.2.1)”

And someone may comment, “well IRS, you’re being pretty stupid about putting presidential tax returns into double-sealed envelopes. As everyone knows, every president (and most presidential candidates) since Nixon made their tax returns public.”

Well the double-secrecy is actual a good process to follow, as there is no requirement that any presidential return be made public:

I individual income tax returns — including those of public figures — are private information, protected by law from unauthorized disclosure. Indeed, the Internal Revenue Service is barred from releasing any taxpayer information whatsoever, except to authorized agencies and individuals. Like all other citizens, U.S. presidents enjoy this protection of their privacy. Since the early 1970s, however, most presidents have chosen to release their returns publicly. In the hope of making this information more widely available, the Tax History Project at Tax Analysts has compiled an archive of presidential tax returns.

So, it makes sense to include that secrecy. As it is possible for a president not to release tax return.

A proposal to include mandatory audits for others.

For myself, I’d be more interested in if their were any amended returns. But honestly, the President and Vice-president would be the people I would least be interested in audited. The scrutiny and prestige of those positions are so large that seriously, who in their right mind would cheat on the taxes? I’d be more interested in auditing members of Congress who have been weaseling about for years.  For instance, 47% of Congress are millionaires. Now, this isn’t all the surprising to me, of course wealthier people would flock to centers of power. After all, some of the founders of our country were pretty dang wealthy themselves.

But here’s the difference, some wealthy politicians make money in the private sector and then go to Congress. But today, Congress is full of life-long politicians. They’ve done nothing else but hold public office. So how did they get so wealthy?

Take the curious case of Senate Majority Leader, Harry Reid, who, born poor, works 43 in public service and now has a net worth of approximately $4.6 million.

Mark Noonan of the Nevada News & Views writes in 2009 more on this:

“Reid was elected to the State Assembly in 1966 and in the past 43 years (when Reid went from 27 years old to 70 – and your humble correspondent went from 2 to 45), the only gap in public service was the two years in the mid-70′s between his term as Lt. Governor and his service on the Nevada Gaming Commission. And during that time he ran for Mayor of Las Vegas, leaving little time to build up a fortune in the private sector….Does anyone want to believe that Reid has done this? That he has saved his government-salary pennies (including for all those years when he made far less than even $107,000.00 per year) and built up his fortune just out of the money we know he’s been earning since he entered public office?”

The likelihood of Congress requiring the IRS to audit Congress

See here’s the thing. Congress writes the law. While they may write a law to subject the executive branch or judicial branch to mandatory audits, how likely is it they they mandate that the IRS audit them? I guess it possible. Congress did just freeze any pay raises,  but that is when they have a 18% approval rating.

Also, for many members of Congress, clearly a pay raise is not necessary for them to increase their wealth. They manage to get rich through some other mechanism than wages.

On a unrelated topic,  Harry Reid claims that allegations of bribery are not true.