President Trump has nominated a lawyer from a firm that worked on his taxes to become the top attorney at the Internal Revenue Service, an arrangement that could add to the scrutiny that the nomination was already likely to face after the administration granted the president protection from tax audits last month.
The White House said on Tuesday that Mr. Trump was nominating James R. Gadwood, a tax lawyer at Miller & Chevalier, to be the chief counsel of the I.R.S. Miller & Chevalier represents DJT Holdings LLC, Mr. Trump’s holding company, in tax matters, according to three people familiar with the matter.
Mr. Gadwood, who says on his law firm profile that he has represented large corporations and the wealthy in I.R.S. audits, did not immediately respond to a question about whether he had participated in his firm’s work for Mr. Trump. Mr. Trump and his holding company have repeatedly faced I.R.S. audits; the agency’s procedure had been to audit the president’s tax return every year.
A focus in Mr. Gadwood’s confirmation process will probably be the Trump administration’s apparently unprecedented move to stop I.R.S. audits of Mr. Trump, his family and their affiliates. Todd Blanche, the acting attorney general, ordered that protection, which covers tax returns already filed, as part of the resolution to a lawsuit Mr. Trump brought against the I.R.S. at the start of the year.
The Trump administration has stood by the tax immunity even as it backed away from creating a $1.8 billion fund that was intended to compensate self-proclaimed victims of federal overreach. The fund was part of a deal to end Mr. Trump’s lawsuit against the I.R.S., which argued that the agency should have stopped the leak of Mr. Trump’s tax returns during his first term.
Mr. Blanche’s order to end audits of Mr. Trump and his family raises profound legal questions for the I.R.S., including whether agents from the tax collector could one day face criminal penalties if they obey the directive. One outstanding tax dispute with the I.R.S. could have cost Mr. Trump more than $100 million.
But it is unclear how or whether Mr. Gadwood would weigh in on the audit immunity. The current acting chief counsel of the I.R.S., Kenneth Kies, previously represented Mr. Trump on tax issues. Mr. Kies has recused himself from issues involving Mr. Trump, The New York Times previously reported.
If confirmed, Mr. Gadwood would oversee a staff of several thousand lawyers who help administer the tax system by writing tax regulations, providing advice to I.R.S. agents in audits and representing the agency in tax court. They also provide input on issues outside of tax court: Lawyers at the I.R.S. had pushed for the Justice Department to contest Mr. Trump’s suit against the I.R.S. The Justice Department instead never responded to Mr. Trump’s suit at all, and Mr. Blanche offered him the sweeping tax protections.
Mr. Gadwood is the second person Mr. Trump has nominated to the top I.R.S. legal job in his second term. Mr. Trump pulled his first nominee, Donald L. Korb, a tax lawyer who had the position during the George W. Bush administration, after he came under fire from the hard-right activist Laura Loomer.
The I.R.S. has been rudderless for much of Mr. Trump’s second term, cycling through half a dozen temporary leaders. Mr. Trump fired his choice for I.R.S. commissioner, the former Republican congressman Billy Long, after just two months last year. Frank Bisignano took over the I.R.S. in the newly created role of chief executive officer, a job he took on in addition to his duties running the Social Security Administration.
Mr. Trump has taken a close interest in the I.R.S. chief counsel job in the past. In his first term, he asked Senate leaders to prioritize the confirmation of his nominee, Michael Desmond, who went on to serve in the job for two years. Mr. Desmond is now the chairman of the tax practice at Miller & Chevalier.
Benjamin Protess contributed reporting
