Assistant Treasury Secretary Kenneth Kies has been ousted after warning that President Donald Trump’s administration was at risk of breaking a law forbidding White House officials from intervening in Internal Revenue Service audits, The Wall Street Journal reported Thursday.
The Journal cited several unnamed sources familiar with the matter.
Kies had reportedly “clashed behind the scenes with White House officials,” including at a “recent meeting in which he contended that a potential White House request would violate Section 7217 of the Internal Revenue Code.”
Section 7217 of the IRS code 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.”
In dual roles as the Treasury’s assistant secretary for tax policy and acting chief counsel at the IRS, Kies oversaw the development of federal tax policy and the implementation of tax legislation, including the GOP’s “big, beautiful” and widely debilitating tax and spending bill.
“We appreciate his service to our nation,” a Trump official told The New York Times.
Kent Nishimura/Bloomberg/Getty Images
Kies reportedly worked as a tax lawyer for Trump before joining his administration and recused himself from Trump’s case against the IRS. The president sued the agency for $10 billion in January, but moved to dismiss the filing in exchange for a $1.8 billion slush fund.
The so-called “settlement” was reached in May before Trump’s lawsuit concerning an IRS contractor leaking his tax records could be litigated. The deal also granted Trump and his family extensive protections against future IRS audits.
It’s unclear exactly which request Kies was concerned about, the Journal notes. The Times said it is also unclear when Kies will be leaving the Treasury Department. The paper did not confirm a specific reason for his exit.
Trump recently nominated James Gadwood, a tax attorney at law firm Miller & Chevalier, to be chief counsel at the IRS and an assistant general counsel at the Treasury. Gadwood previously represented the Trump Organization, according to a financial disclosure obtained by the Times.
While U.S. District Judge Kathleen Williams ruled Monday that Trump’s IRS lawsuit was filed for an “improper purpose” and recommended disciplinary actions for his attorneys, the president appears intent on retaining his protections from any and all IRS audits.