On The Money – All eyes on IRS audits

The IRS is under fire over questionable audits conducted during the Trump administration. We’ll also look at falling gas prices, AbbVie’s tax evasion tactics and the companies at risk of losing their assets to Russia. 

But first, President Biden just awarded the Medal of Freedom to 17 recipients, including his late friend Sen. John McCain (R-Ariz.) and a few historic firsts.  

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

IRS in political storm over Trump-era audits  

The IRS is at the center of a political storm over audits conducted on former FBI director James Comey and former deputy director Andrew McCabe. 

• Both had high profile fights with President Trump, and the rare audits were conducted on Trump’s watch under the Trump-appointed IRS commissioner Charles Rettig. 
  
• Comey was fired by President Trump in 2017 during the FBI’s probe into possible relationships between the Russian government and Trump’s 2016 campaign team.
  
• McCabe took over for Comey as acting director of the FBI and was fired in 2018. 

According to The New York Times, Comey and McCabe were both served a rare and highly demanding type of IRS audit following their firings.  

“The possibility that the former President or someone in the White House, his cabinet, his appointees, or leadership working under the Trump-appointed IRS Commissioner may have requested an audit of those deemed disloyal is alarming,” House Ways and Means Committee Chairman Richard Neal (D-Mass.) said in a statement Thursday. 

“It is unconscionable that someone within the IRS may have acted on this request out of loyalty to the Trump administration or fear of retaliation for failing to act,” he said. 

One wild stat: There was a 1-in-30,000 chance of Comey getting the NRP audit and a 1-in-20,000 chance of McCabe getting the audit, according to the Times. Taken together, that’s about a 1-in-600,000,000 chance of two randomly selected individuals receiving the same audit in a pool of more than 150,000,000 U.S. taxpayers. 

The Hill’s Tobias Burns breaks it down here. 

WHEN I DIP YOU DIP WE DIP 

Gasoline prices dip a quarter from recent $5 highs 

Gas prices fell slightly this week, with a select few stations dropping beneath $4 per gallon as prices fall across the board.  

• Data from the Oil Price Information Service shared with The Hill shows that the median price of gasoline in the U.S. is about $4.60 per gallon, down from about $4.70 per gallon a week ago.  
  
• Average prices are also down to $4.74, down from $4.84 a week ago. 
  
• The data shows that a small percentage of stations — 2.3 percent — are below $4 per gallon. A week ago, just 0.5 percent were below $4 per gallon.  

Still, this is a small share of the more than 100,000 gas stations in the U.S. The Hill’s Rachel Frazin and Zack Budryk have more. 

SHADY RECORDS

Drug company AbbVie used Trump tax law to shield profits, Senate report finds 

Pharmaceutical giant AbbVie generates almost all of its sales in the United States but has allegedly exploited former President Trump’s tax law to shield much of its sales from taxes, according to an interim report released Thursday by Democrats on the Senate Finance Committee. 

• The report details how loopholes in the 2017 tax law have allowed AbbVie, a large multinational corporation headquartered in the U.S., to substantially shrink its tax burden and stash profits overseas to avoid paying taxes on prescription drug sales. 
  
• According to the report, AbbVie generated over $56 billion in worldwide sales in 2021, with over 77 percent made to American consumers, yet just 1 percent of AbbVie’s income was reported in the U.S. for tax purposes. 

AbbVie makes the arthritis drug Humira, which has been the best-selling drug in the world for several years. Over the last four years, AbbVie has sold $62 billion worth of Humira in the United States. 
Find out more on this here from The Hill’s Nathaniel Weixel. 

Subscribe to “The Hill: Just in” 

Our new YouTube channel posts rapid updates on the top story of the day, tracking key figures in politics and making sense of important policy decisions and how they impact your life.

SOON TO SEIZE

At least 47 major companies at risk of having Russia seize key assets: report 

At least 47 multinational companies with a presence in Russia, including gas giant BP and aircraft behemoth Boeing, are at risk of having key assets seized by the Russian government. 

Russia’s invasion of Ukraine in February spurred dozens of major international companies to pull out of the country amid sweeping sanctions imposed by the United States and its allies. 

A report that will be published next week from the Russian monitoring organization the Moral Rating Agency says the Kremlin may soon seize or redirect assets of those companies to a friendlier firm. 

• Other at-risk firms include Shell, Samsung, PepsiCo, Nissan, Intel, Microsoft, Toyota and Ford, according to the report. 
• The companies at risk of losing assets to Russia make up 24 percent of the 200 largest corporations in the world.  

The Hill’s Brad Dress has more here. 

Good to Know

From The Associated Press: “More Americans applied for unemployment benefits last week and while layoffs remain low, it was the fifth consecutive week that claims topped the 230,000 mark and the most in almost six months. 

“Applications for jobless aid for the week ending July 2 rose to 235,000, up 4,000 from the previous week and the most since mid-January, the Labor Department reported Thursday. First-time applications generally track with the number of layoffs. Until early June, claims hadn’t eclipsed 220,000 since January and have often been below 200,000 this year.” Read more. 

Here’s what else we have our eye on: 

• Former President Trump and his son were among six board members removed from the board of Trump’s social media company weeks before it was hit with federal subpoenas, according to state records.  
  
• House Republicans are weighing what kind of national-level abortion ban legislation to pursue if they win the House majority next year, with a 15-week ban or further on the table. 
  
• The Biden administration will grant nearly $1 billion to 85 airports across the country to improve terminals, the White House announced on Thursday. 

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

VIEW FULL VERSION HERE