President Donald Trump has bragged that he is smart because he pays as little of his taxes as he can, so it only makes sense that his new Internal Revenue Service commissioner is an attorney whose firm specializes in helping clients avoid paying billions in taxes.
Former Ernst & Young executive David Kautter will begin his tenure as IRS chief on Monday, though he’s already been working on tax policy for the Trump administration since receiving a post in the Treasury Department this summer.
According to the Daily Beast, IRS commissioners do not usually have experience in helping clients reduce their tax payments that comes with running the tax practice at a Big Four accounting firm.
Ernst & Young does not have a sterling reputation when it comes to IRS regulations.
In 2010, four members of an illegal tax-shelter scheme at EY were sentenced to 20 to 36 months in prison — two later had their sentences overturned — and the firm paid $123 million to the IRS as part of the settlement.
The tax-shelter scheme allowed 200 clients making more than $10 million to avoid paying their U.S. taxes totaling roughly $2 billion.
Kautter’s tenure at EY coincided with the scheme — the firm has said he was not a part of the scheme, though he did head the company’s tax practice — but he was not charged in the incident. This summer, Republicans and Democrats unanimously approved Kautter’s nomination to the Treasury Department during a Senate Finance Committee meeting, despite some concern from lawmakers about his past as an EY executive during the time of the scandal.
“Through the vetting process for his nomination, Mr. Kautter said, essentially, this was not his job to do anything about these abuses,” Democratic Senator Ron Wyden said. “Taking him at his word, others in the firm may have approved these shelters, but I do not think it is appropriate to look the other way when confronted with evidence of wrongdoing.”
In response, Kautter seemed to admit some complicity in the illegal activities when said he wished he could have prevented the scheme at the time and told Wyden that he “wishes he had done differently” when he was at EY.