The Internal Revenue Service, frequently drawn into controversy over the tax returns of high public officials, has decided to automatically audit the President's and Vice President's tax returns each year.
Having played a key role in the investigations of possible criminal activity by former President Nixon and former Vice President Agnew, IRS said the action was taken in "the interest of sound tax administration" and "everything that has happened in the past."
IRS spokesman Leon Levine said that new policy "automatically relieves any particular IRS employee" of the burden of whether to audit a presidential tax return.
The decision, made about April 1, first affects returns filed this year for 1976 income and will include the returns for the President's and Vice President's last year in office.
Presidential press secretary Jody Powell said the White House endorses the action and noted that "it helps to allay any concerns in the public about the President's payment of taxes."
The decision apparently originated within IRS, and it could be modified or ended at any time. Thus it is unknown whether the policy will affect future administrations. Levine said that in taking the step, IRS was making no comparison of President Carter and Vice President Mondale to Nixon and Agnew.
Levine said the purpose of an IRS audit is, essentially, to verify that the information on a tax return is correct and that the return shows the correct tax liability. The audits are no conducted in any fixed IRS office, Levine said, but are generally conducted where the taxpayer lives and works.
Levine confirmed the decision only because Carter and Mondale have waived their right to confidentiality regarding the auditing of their tax returns. IRS normally does not confirm or deny that an audit or other investigation will be made, is being made or was made.
Despite that, it was learned earlier this month that President Carter's return for 1975 was being audited. At that time, White House spokesmen first said that the President had requested the audit, but later said the audit was initiated by the IRS.
About the same time, Mondale's office said the Vice President's tax return for 1976 was being audited and that IRS had asked for additional information to support the return. Mondale's spokesman, Al Eisele, said the results of the audit and the Vice President's returns would be made public today.
Sources indicated the audit apparently found no irregularities or additional taxes due.
The auditing of public officials' tax returns has been a sensitive topic for years. President Nixon, who had tried to use the IRS to harass political opponents, was found to owe $432,787 in back taxes after IRS and congressional investigators found he improperly deducted his gift of vice presidential papers to the National Archives and failed to report as income government-financed alterations to his residences. No fraud was alleged, however.
IRS and federal prosecutors also conducted extensive inquiries into contractors' tax returns and those of Agnew, beginning a series of allegations of illegal payments that led to Agnew's resignation.