In the years after President Richard Nixon enlisted the Internal Revenue Service to investigate his political opponents, Congress passed a series of laws to make sure the agency would focus on collecting taxes and not use its vast powers to carry out political vendettas.
But President Trump has moved swiftly to suppress that independence in the first few months of his second term and, tax experts and former agency officials warn, return the I.R.S. to darker days when it was used as a political tool of the president.
His administration has decimated the ranks of I.R.S. civil servants and moved to install political allies in their place. This week, he publicly called for Harvard to lose its tax-exempt status, an extraordinary attempt to enlist the I.R.S. in his feud with the wealthy research university. In the Oval Office on Thursday, Mr. Trump renewed that threat and suggested that several other universities the administration has accused of antisemitism could also lose their tax-exempt status.
“Tax-exempt status, it’s a privilege, it’s really a privilege and it’s been abused by a lot more than Harvard, so we’ll see how that all works out,” he said, also mentioning Columbia and Princeton.
The I.R.S. is now weighing whether to revoke Harvard’s tax exemption, as The New York Times reported earlier this week.
Federal law bars the president from ordering the I.R.S. to conduct specific tax investigations. A White House spokesman has said the agency’s scrutiny of Harvard began before the president’s social media post. Mr. Trump said Thursday that he did not believe the I.R.S. had “made a final ruling.”
Transforming the I.R.S. and its tens of thousands of employees into political enforcers for the president — a doomsday scenario long feared by conservatives — would shake a foundation of American civic life. Tax experts and I.R.S. officials warn that the federal government may start to struggle to collect enough revenue if Americans start to believe the nation’s tax laws are politically compromised and weakly enforced.
“We’re dependent for collecting taxes on the good faith of the American people,” said Michael Graetz, a tax scholar at Columbia Law School. “If the I.R.S. becomes politicized, and people feel like only one party is playing by the rules, then I would expect noncompliance would go up.”
The I.R.S. declined to comment. The White House did not respond to a request for comment.
Mr. Trump has long feuded with the I.R.S. Over the course of his business career, he aggressively tried to minimize his tax liability, at one point trying to declare losses on a Chicago real estate investment twice. As of last year, he still faced an active I.R.S. audit, his son, Eric Trump, confirmed to The Times, and Mr. Trump previously broke from tradition when he did not voluntarily release his tax returns when he first ran for president.
During his first term, Mr. Trump saw the potential punitive power of the I.R.S., repeatedly raising the possibility of the agency conducting audits on his perceived political enemies, though his aides resisted such requests at the time. Two of Mr. Trump’s opponents, Andrew G. McCabe and James B. Comey, did ultimately face audits, though an inspector general found they were randomly selected.
Back in office a second time, Mr. Trump has been more aggressive in trying to consolidate power of the I.R.S. During his most recent campaign, he raised the idea of abolishing the I.R.S., and not long after winning re-election, he nominated Billy Long, a former Republican congressman and political ally, to lead the agency, abandoning the norm that commissioners stay on after a change in presidents.
His administration has also pressured the I.R.S. to share data to help Immigration and Customs Enforcement deport people, overriding widespread concern among I.R.S. staff that doing so could violate taxpayer privacy protections. Several senior I.R.S. officials, including the acting commissioner, stepped down in the wake of that decision.
In March, a Treasury official in March asked the I.R.S. to look into concerns from Mike Lindell, the pillow entrepreneur, about an audit he faced, according to people familiar with the matter and an email viewed by The New York Times.
David Eisner, a Treasury official, wrote an email to a top I.R.S. official that “a high-profile friend of the president,” Mr. Lindell, “recently received an audit letter, from what I understand, his second in two years.” Mr. Eisner wrote that Mr. Lindell “is concerned that he may have been inappropriately targeted.”
I.R.S. officials did not act on the email, and instead referred it to the agency’s inspector general, according to the people. But the message alarmed agency staff, as it appeared that President Trump hoped to use the tax collector to protect his friends and allies from normal scrutiny.
A spokesperson for the Treasury Department said the request followed regular protocols.
Mr. Trump is not the first president to try to use the I.R.S. to his liking.
President Franklin D. Roosevelt’s Treasury secretary, Henry Morgenthau, had the I.R.S. initiate an investigation into Huey Long, a senator from Louisiana who had been critical of Mr. Roosevelt’s New Deal policies. The Nixon White House sent a list of 600 political enemies to the I.R.S. and asked the agency to look at their financial records and make their lives more difficult, actions discovered in the Watergate investigations.
A difference now, historians and former I.R.S. officials said, is the brazen nature of Mr. Trump’s requests.
“Whereas White House officials were pressuring the I.R.S. to revoke the tax exemption for nonprofit organizations during the Nixon administration, you didn’t have the president going out there saying, ‘I am going to pull the tax exemption for Harvard University,’” said Joseph Thorndike, a historian for Tax Analysts. “That’s a much more direct threat than has been employed in the past. In my view, that’s a significant escalation.”
In recent years, any hint of political influence at the I.R.S. has been met with fierce opposition.
During the Obama administration, Republicans waged an aggressive investigation of the agency amid allegations that it was unfairly scrutinizing whether conservative groups were eligible for tax-exempt status. The backlash led President Barack Obama to fire the acting I.R.S. commissioner in 2013. (An inspector general later concluded that the agency had improperly targeted both conservative and liberal organizations.)
It remains unclear how the I.R.S. will act now when it comes to Harvard. Revoking the tax exempt status of an organization would typically be the result of a lengthy back-and-forth process that could ultimately be appealed in court.
“The I.R.S. does not and should not take action regarding the possibility of impacting the tax-exempt status of any organization without conducting an appropriate examination,” said Charles Rettig, Mr. Trump’s pick to lead the I.R.S. in his first term. “There are many opportunities for resolution that would not result in the removal of the tax-exempt status of an organization.”
Even the threat of losing tax-exempt status has alarmed organizations that may not have Harvard’s resources to fight the I.R.S. in court. Mr. Trump on Thursday identified several other groups — including Citizens for Responsibility and Ethics in Washington, a nonprofit watchdog group focused on corruption — that he suggested should lose their tax exemptions.
The president’s language indicates he is intent on harnessing the agency’s power, former officials warned.
“This is an administration that is saying it’s going to get revenge,” said John Koskinen, who served as commissioner of the I.R.S. during the Obama administration and during the first part of Mr. Trump’s first term. “To weaponize the I.R.S. seems to me to be a very dangerous precedent.”
Andrew Duehren covers tax policy for The Times from Washington.
Alan Rappeport is an economic policy reporter for The Times, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters.
Russ Buettner is an investigative reporter. He has written extensively about the finances of Donald J. Trump.
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