Senate Finance Committee Chairman Ron Wyden, D-Oregon, sent a letter Tuesday to former President Trump’s former accounting firm, Mazars USA, asking for more information about its disclaimer that a decade’s worth of financial statements should no longer be considered reliable.
Democrats in Congress have been pushing Trump to disclose his tax returns and more financial information ever since the 2016 campaign, but so far much of the information has yet to come to light. However, New York Attorney General Letitia James revealed the firm’s position in a court filing in February (see story). “Last week, after review of OAG’s filings, Donald J. Trump’s and the Trump Organization’s former accounting firm informed the Trump Organization that the Statements of Financial Condition from 2011 through 2020 should no longer be relied upon, withdrew from representing the Trump Organization, and instructed the Trump Organization’s General Counsel to inform recipients that the statements could no longer be relied upon,” said the filing.
Wyden’s office noted that it is highly uncommon for a global accounting firm to cast doubt on the validity of work for a major client, especially a multibillion-dollar company mainly owned by someone who became the president of the United States.
Wyden asked in his letter to Mazars about the firm’s position on the accuracy of former President Trump’s tax returns, and the extent to which the firm has notified the former president’s businesses about the need to file amended returns with the IRS or alert lenders of inaccuracies or misrepresentations in documents submitted to obtain loans. A Mazars spokesperson did not immediately respond to a request for comment.
“In light of Mazars’ recent letter, it appears the Trump Organization may have submitted inaccurate or misleading statements of financial condition information in order to obtain loans,” Wyden wrote. “As you are aware, the fraudulent inducement of a loan or other contract is a federal felony offense. As certified tax practitioners, Mazars’ employees are bound by several duties relating to the identification of incorrect information or omissions related to tax returns prepared for its clients.”
He pointed out that Treasury Department regulations require those who practice before the IRS to notify their clients when it learns that the client has “not complied with the revenue laws of the United States or has made an error in or omission from any return, document, affidavit, or other paper which the client submitted or executed under the revenue laws of the United States.”
“These regulations also require practitioners to take steps to ensure that return information being provided to the IRS is accurate and complete,” said Wyden. “The failure to do this can have important consequences for the client, including the reopening of a closed audit ‘if there is evidence of fraud, malfeasance, collusion, concealment, or misrepresentation of material fact.’”
In the letter, Wyden asked the firm a series of questions, including whether Mazars stands by the accuracy of the federal tax returns it prepared for the Trump Organization and its affiliates that were submitted to the IRS between 2011 and 2020, whether it had notified Trump about any errors or omissions, if it had alerted any financial institutions that the Trump Organization’s statements of financial condition for those years were not to be relied upon, whether it had conducted an internal investigation into the reliability of the financial statements and if it had done appraisals of any Trump Organization assets including property.