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Assistant Treasury Secretary Kenneth Kies has been removed from his post after reportedly warning that the Trump administration risked violating federal law by intervening in Internal Revenue Service audits, according to a report by The Wall Street Journal.
Private clash with the Trump administration
Citing unnamed sources familiar with the matter, the outlet reported that Kies had privately clashed with White House officials, including during a recent meeting where he argued that a proposed request would violate Section 7217 of the Internal Revenue Code. The law prohibits White House officials from directing the IRS to initiate or end audits or investigations involving specific taxpayers.
Section 7217 states that it is “unlawful for any applicable person to request, directly or indirectly, any officer or employee of the Internal Revenue Service to conduct or terminate an audit or other investigation of any particular taxpayer.”
Kies served as both the Treasury Department’s assistant secretary for tax policy and the IRS’ acting chief counsel. In those roles, he oversaw federal tax policy and implementation of tax legislation, including the Republican-backed tax and spending package championed by President Donald Trump.
“We appreciate his service to our nation,” a Trump administration official told The New York Times.
Kenneth Kies’ concerns about the White House breaking the law
The report said it remains unclear what specific request prompted Kies’ concerns. The New York Times also reported that the reason for his departure has not been officially confirmed and that the timing of his exit remains uncertain.
Before joining the administration, Kies worked as a tax attorney for Trump and later recused himself from the president’s lawsuit against the IRS. Trump sued the agency for $10 billion in January but later moved to dismiss the case as part of a reported $1.8 billion settlement related to litigation over the leak of his tax records by an IRS contractor. The agreement also reportedly provided Trump and his family with broad protections against future IRS audits.
Meanwhile, Trump has nominated tax attorney James Gadwood, who previously represented the Trump Organization, to serve as IRS chief counsel and an assistant general counsel at the Treasury Department. The personnel change comes days after a federal judge ruled that Trump’s IRS lawsuit had been filed for an “improper purpose” and recommended disciplinary action against his attorneys.
