Assistant Treasury Secretary Kenneth Kies has reportedly been pushed out of the administration following clashes with White House officials over potential intervention in Internal Revenue Service audits. The Wall Street Journal, citing unnamed sources, reported Thursday that Kies warned the Trump administration risked breaking a law that prohibits White House officials from intervening in IRS audits.
Kies allegedly contended in a recent meeting that a potential White House request would violate Section 7217 of the Internal Revenue Code. This section of the code states that it is unlawful for any applicable person to request, directly or indirectly, any officer or employee of the IRS to conduct or terminate an audit or investigation of any particular taxpayer.
In his roles as the Treasury's assistant secretary for tax policy and acting chief counsel at the IRS, Kies was responsible for the development of federal tax policy and the implementation of tax legislation. He had reportedly worked as a tax lawyer for Trump before joining the administration and had recused himself from Trump's lawsuit against the IRS.
It remains unclear which specific request prompted Kies's concerns, and the Treasury Department has not confirmed the exact reason for his departure. A Trump official offered a brief statement to The New York Times, saying, "We appreciate his service to our nation."
Earlier this year, Trump sued the IRS for $10 billion, though he later moved to dismiss the filing in exchange for a $1.8 billion settlement. This agreement, reached in May, came before his lawsuit concerning the leak of his tax records could be litigated and also reportedly granted Trump and his family protections against future IRS audits.
Separately, a U.S. District Judge ruled Monday that Trump's IRS lawsuit was filed for an "improper purpose" and recommended disciplinary actions for his attorneys.
James Gadwood, a tax attorney previously affiliated with the Trump Organization, has been nominated by Trump to serve as chief counsel at the IRS and an assistant general counsel at the Treasury.