At the Congressional Joint Committee on Taxation examined In the IRS audits of Donald Trump’s taxes, an agent’s note in the 2017 review of Trump’s filings stood out.
The IRS agent wrote that Trump “hires a professional accounting firm and attorney to prepare and file a tax return” and that they “ensure” that Trump “properly reports all income and deductions.”
According to a report on the IRS’s mandatory audit of the former president’s taxes, released Tuesday by the House Ways and Means Committee, staffers at the Joint Committee were puzzled by the note.
“Staff did not understand why the IRS believed employing an attorney and accounting firm ensured accuracy,” the Ways and Means Committee wrote in its report.
The accounting firm Mazars USA is one of the largest in the country and worked for Trump for decades until it severed ties with the former president and his firm in February this year. In the months since, Trump and his company’s lawyers have sharply criticized the firm’s work.
According to forensic accountant Bruce Dubinsky, it is common for IRS agents to show respect to large accounting firms.
“If I’m a financial agent and I see that he has Mazars or[some other company]I’m going to say, ‘Okay, look, the returns are all computerized, they’re being done right. I have a certain level of confidence that someone in their quality control process – because all of these companies have a quality control review process – has looked at several levels of it, and I’m not going to look at every number,'” Dubinsky said.
But Mazars’ work was recently criticized by two lawyers Trump Organization companies found guilty on December 6, 17 New York State criminal charges related to tax fraud. During the trial, an attorney for the Trump Organization alleged during closing arguments that a Mazars accountant “failed in his job” to detect wrongdoing by company executives.
That accountant, Donald Bender, described Trump’s annual tax returns as a pile of papers “several feet” high, gesturing over the witness stand with his hands raised. Bender testified that he worked on Trump and the company’s taxes for nearly four decades, but that relationship abruptly ended in February.
Mazars wrote in a letter to the general counsel of the Trump Organization A decade’s worth of reports “You shouldn’t rely on that anymore.” In the letter, an attorney for Mazars wrote that the company “conducted its work in accordance with professional standards” and compiled the statements based on information from the Trump Organization.
In the letter, a Mazars executive cited revelations from a civil investigation by a New York attorney general as one of the reasons the accounting firm could no longer stand by its Trump accounts. In September, the New York Attorney General sued Trump and his company for years of massive fraud related to the valuation of Trump Organization real estate.
A spokesman for the Trump Organization said in a February email, “While we are disappointed that Mazars has decided to part ways, their letter dated February 9, 2022 confirms that, after a subsequent review of all previous financial statements Mazars’ work has been performed in accordance with all applicable accounting standards and principles and these financial statements are free from material inconsistencies.”
But Trump and his team have since pissed Mazars off, often criticizing the company.
Trump summarized his defense team’s stance on Mazars in a post on his social media platform Truth Social on Nov. 18.
“The highly paid accounting firm should have routinely picked up these things – we relied on that. VERY UNFAIR!” Trump wrote.
During her closing arguments on Dec. 1, Trump Organization attorney Susan Necheles said Mazars was “either totally negligent or turned a blind eye.”
Mazars and Bender did not respond to requests for comment, but during the Trump Organization’s trial, prosecutors revealed an agreement between the company and Mazars in which the accounting firm stated that its work “does not include any procedures to detect errors, irregularities, or illegal operations.” acts, including fraud or defamation, if any.”
