Treasury official fired after he reportedly warned White House might be violating law

AP Photo/Mark Schiefelbein

Assistant Treasury Secretary Kenneth Kies has been ousted after he reportedly warned that the Trump administration was potentially violating a law prohibiting White House officials from intervening in IRS audits, The Wall Street Journal reported on Thursday.

Kies also serves as acting chief counsel of the IRS. Citing sources familiar with the matter, the Journal said Kies will be exiting in the coming weeks. The report said:

Kies at times clashed behind the scenes with White House officials, the people said. That included a recent meeting in which he contended that a potential White House request would violate Section 7217 of the Internal Revenue Code, one of the people said. That law prohibits the president, vice president, White House staff and certain agency heads from directly or indirectly requesting that the IRS conduct or terminate an audit or investigation of any particular taxpayer.

Section 7217 of the IRS code deems it “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 with respect to the tax liability of such taxpayer.”

The Journal said it was unclear what requests Kies objected to. On Tuesday, The New York Times reported that Kies would leave the Treasury Department, but did not give a reason.

In January, President Donald Trump sued the IRS for $10 billion, alleging that the agency had wrongly targeted him, his oldest sons, Donald Trump Jr. and Eric Trump, as well as the Trump Organization, which the sons run. The president moved to drop the suit in January, in exchange for the Treasury Department setting up a $1.776 billion “anti-weaponization fund” to compensate some of his political allies, including potentially those involved in the Capitol riot. That plan has since been tabled after acute bipartisan pressure.

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