Assistant Treasury Secretary Kenneth Kies has been removed from his position after expressing concerns that the Trump administration might violate a law prohibiting White House officials from interfering in Internal Revenue Service (IRS) audits. This information was reported by The Wall Street Journal on July 18, 2026, citing unnamed sources familiar with the situation.
Kies reportedly had conflicts with White House officials, particularly during a recent meeting where he argued that a potential request from the White House could breach Section 7217 of the Internal Revenue Code. This section prohibits any person from requesting an IRS officer or employee to conduct or terminate an audit of a specific taxpayer.
In his dual roles as assistant secretary for tax policy and acting chief counsel at the IRS, Kies was responsible for overseeing federal tax policy and implementing tax legislation, including the significant tax and spending bill passed by the GOP. A Trump official acknowledged Kies's service but did not provide details regarding the timing of his departure.
Kies previously worked as a tax lawyer for Trump and had recused himself from the former president's case against the IRS, which involved a lawsuit for $10 billion that was later dismissed in exchange for a settlement that included protections against future IRS audits for Trump and his family.
Trump has nominated James Gadwood, a tax attorney from Miller & Chevalier, to succeed Kies as chief counsel at the IRS. Gadwood has previously represented the Trump Organization. A U.S. District Judge recently ruled that Trump's lawsuit against the IRS was filed for an improper purpose, suggesting potential disciplinary actions for his attorneys, yet Trump seems determined to maintain his audit protections.