President’s return ends up in the IRS ‘orange folder’

Trump will not be the first president to have his returns audited. The agency treats presidential and vice presidential returns similarly to those of IRS employees, who also receive a mandatory audit. The procedures are spelled out in detail in Internal Revenue Manual Section 4.2.1.11:

tax returns must be given a full audit — not just a pre-audit survey — regardless of whether a computer program known as the Discriminant Inventory Function identifies the return as raising red flags.

audit is fast-tracked. “The returns must be assigned within 10 business days of receipt in the group. The returns require expeditious handling at all levels to ensure prompt completion of the examinations.

returns must be carefully guarded and locked away when not being actively examined.

returns should be kept in an orange folder at all times.” Under the IRS color scheme, orange folders get the third-highest priority and are reserved for mandatory audits of the president, vice president and IRS employees.

The process begins when the returns arrive in the office of the deputy commissioner for services and enforcement, the top career — that is, not politically appointed — official at the IRS.

One former deputy commissioner, Mark Matthews, said the process was so routine that it barely even came to his attention. “It definitely goes through the deputy commissioner’s office, and I know there was a safe in the back of my office where they kept the original returns,” he said.

Matthews said IRS agents are “scrupulously non-partisan” and would treat the president’s returns without regard to politics. “It is drilled into IRS agents to treat similarly situated taxpayers similarly. It’s not who you are, it’s what your taxes are,” he said.

Once completed, the presidential tax returns are kept in a safe in room 3014 of the IRS headquarters in Washington.

A 1997 audit by the General Accounting Office found that every presidential return since 1913 has been accounted for, kept meticulously in special folders designed to protect the documents from deteriorating over time.

But many of those documents are missing a key part of the return. In her book Unbridled Power: Inside the Secret Culture of the IRS, the agency’s former official historian revealed that many of

Now that he’s president, the integrity of the tax system is at stake, said Joseph Thorndike, director of the Tax History Project and an editor for Tax Analysts. “Can we trust the IRS to enforce the law against their boss? Putting it in the baldest terms, that’s really the question,” he said.

Indeed, the mandatory audits come out of a largely forgotten Nixon scandal, when it appeared that tax problems — not the break-in at the Watergate hotel — was most likely to bring down his presidency. Nixon had claimed a $576,000 deduction for 1969 by