The IRS could prove to be a key battleground in former President Trump’s potential bid to assert presidential authority over appropriated funds if he returns to the White House.
A flashpoint in Trump’s first term in office was his impeachment trial, when it was revealed he allegedly put pressure on Ukrainian President Volodymyr Zelenskyy to investigate possible criminal activity by then-Democratic presidential candidate Joe Biden and his family in exchange for unlocking $400 million in military aid to Ukraine approved by Congress.
The Government Accountability Office found that the Trump administration, which eventually released the funds, violated the Congressional Budget and Impoundment Act of 1974, which bars presidents from withholding funds appropriated by Congress.
Trump and his allies, however, claim the impoundment act is unconstitutional and have vowed to test the law if he wins a second term.
“I will use the president’s long-recognized impoundment power to squeeze the bloated federal bureaucracy for massive savings. This will be in the form of tax reductions for you. This will help quickly to stop inflation and slash the deficit,” Trump said in a campaign video last year.
Given Trump’s opposition to the extra funds provided to the IRS as part of the Inflation Reduction Act, some policy observers believe the agency could be the central target of his potential administration’s plan to assert control over appropriations.
“I could certainly see a scenario where they challenge the money appropriated for extra personnel for the IRS,” Robert H. Bradner of Holland & Knight LLP told Tax Notes.
Bradner said if the Trump administration were to impound funds appropriated to the IRS, it could set off a chain of events that put into question the legality of the impoundment act.
“The issue is the GAO, which has the authority to review the use of appropriated funds and sue the executive branch, is part of the legislative branch,” Bradner noted. “They can’t be involved in the execution of the law.”
Bradner pointed out that a previous Supreme Court ruling limited the GAO’s involvement in reviewing the impoundment of appropriated funds.
Theoretically, Bradner said, it could be that Trump withholds funds for the IRS, the GAO rules he violated the impoundment act, and then the administration simply ignores the ruling, triggering a lawsuit by the GAO.
Such a case would then end up in the Supreme Court, where there is a 6-3 conservative majority.
Alan B. Morrison of George Washington University says Trump potentially impounding funds would be “plainly unconstitutional.”
“There are two questions: Does Congress give the president the discretion to spend less money than allocated? And can a president do it in the absence of explicit authority? The answer to both is no,” Morrison told Tax Notes.
Morrison said the first question is answered through the impoundment act, while the second question was addressed in the 1998 Supreme Court decision in Clinton v. New York, No. 97-1374, which struck down legislation that gave presidents the authority to nullify or cancel individual provisions of a legislative package.
Morrison thinks Trump would need help from Congress for his plan to impound funds to succeed.
“Only way for them is if they pass a law,” Morrison said.
Therefore, Trump will need to hope that he not only takes back 1600 Pennsylvania Ave. next year but that, down the street, Republicans retain control of the House and obtain an unlikely supermajority in the Senate.