Trump’s Tax Man Pick Worked for the Firm That Saved Him Millions

If you thought the revolving door between government and private practice was bad, wait until you see the latest nomination. President Trump just tapped James R. Gadwood to be the top lawyer at the Internal Revenue Service. Yes, the IRS — the agency that audits tax returns, not the one that throws ticker tape parades. And here’s the kicker: Gadwood works at Miller & Chevalier, the D.C. law firm that has represented Trump himself in tax matters. For decades.

Let that sink in. The man who would oversee the legal interpretation of the tax code — including how it applies to the president — is a current partner at a firm whose client list includes the guy who nominated him. That’s not a conflict of interest. That’s a collision course.

When news broke about Gadwood’s nomination, it wasn’t just the tax world that took notice. Markets, already jittery from SpaceX’s recent IPO tumble, seemed to shrug off the potential conflict. But the optics? Brutal. And with tech stocks tumbling on AI spending fears, the last thing the administration needs is a tax controversy that fuels more uncertainty.

The Treasury Department confirmed the nomination late Monday, but the timing feels deliberate. Gadwood’s background is impeccable on paper: Harvard Law, tax partner at Miller & Chevalier since 2010, former clerk for a federal judge. But his firm’s relationship with Trump dates back to the 1970s, when the Trump Organization first hired Miller & Chevalier to handle real estate tax structures. Since then, the firm has represented Trump in multiple IRS audits and even in the defense of his tax returns during the 2020 congressional investigations. Now his own lawyer could become the government’s top tax enforcer.

“This is the kind of appointment that makes you question whether the separation between personal interest and public duty still exists,” said Professor Alan Morrison, an ethics expert at George Washington University Law School. “The IRS chief counsel is supposed to be impartial — not someone who owes their career advancement to the very person they would be investigating.”

Gadwood is not the first IRS chief counsel to come from private practice. In fact, every single one during the past two administrations had ties to Big Law. But none of them represented the sitting president. The closest parallel might be the controversy around former Treasury Secretary Steve Mnuchin, a former Goldman Sachs executive, but even he didn’t directly audit his own bank.

The Miller & Chevalier Connection

Miller & Chevalier is a white-shoe tax firm with a specialization in representing high-net-worth individuals and corporations before the IRS. Its client list is a who’s who of Fortune 500s, but Trump’s account is the elephant in the room — or the golden toilet, if you prefer.

The firm has represented Trump in at least three major tax disputes: the 2015–2016 audit of his charitable deduction for a conservation easement, the 2018 IRS examination of his overseas business interests, and the 2020 fight over the release of his tax returns to Congress. In each case, Miller & Chevalier argued for aggressive interpretations of the tax code that saved Trump millions. Now Gadwood would be the one signing off on IRS guidance that could benefit or hinder the same clients he used to represent.

Ethics rules require federal employees to recuse themselves from matters where they have a personal or financial conflict. But recusal is often left to the employee’s judgment. And the firm’s involvement with Trump’s taxes is ongoing — the 2018 audit closed only last year, and new disputes could arise.

Sarah Binder, a senior fellow at the Brookings Institution who studies government ethics, says recusal won’t be enough. “Recusal works when there’s a clear line. But the chief counsel doesn’t just handle individual cases; they set policy. The office writes regulations, issues revenue rulings, and decides which cases to pursue. Even if Gadwood recuses himself from Trump-specific matters, his implicit bias could shape how the IRS treats wealthy taxpayers — i.e., the kind Trump wants protected.”

The White House insists the nomination is about merit. Press Secretary Kayleigh McEnany called Gadwood “a preeminent tax lawyer with decades of experience.” But she didn’t address the conflict-of-interest elephant. And the vetting process — rushed, as usual — appears to have glossed over the firm’s client list entirely.

A History of Tax Battles

Trump’s relationship with the IRS is, to put it mildly, complicated. The New York Times exposed in 2020 that Trump paid just $750 in federal income tax in 2016 and 2017, and that he had an ongoing audit with the IRS worth over $100 million. He fought to keep those returns secret, and his lawyers at Miller & Chevalier were central to that fight.

Now the Senate will be asked to confirm the same lawyer who helped bury those returns to become the top cop on the tax beat. It’s like appointing the wolf to guard the henhouse — except the wolf is also the one who helped the hen hide the eggs.

Gadwood’s nomination comes at a time when the IRS is under bipartisan fire for being both too aggressive and too lenient. A 2023 report from the Treasury Inspector General found that the IRS audited individuals earning less than $25,000 at a rate five times higher than those earning over $1 million. If confirmed, Gadwood would have the power to redirect enforcement priorities — either toward or away from the wealthy.

“The IRS chief counsel sets the legal framework for tax enforcement. If that person is beholden to a client — even as a former client — you risk losing the public’s trust in the system,” said Steve Rosenthal, a senior fellow at the Tax Policy Center. “And trust in the tax system is already at historic lows. Only 56% of Americans think the IRS is fair, according to a 2024 Pew poll. This won’t help.”

What This Means for Tax Enforcement

If the Senate confirms Gadwood, the immediate effect will be a flurry of recusal orders. Expect him to step away from any rulemaking or litigation involving the Trump Organization, his former firm, or any client he personally worked with. But the conflicts don’t stop there. Miller & Chevalier represents hundreds of corporations that could benefit from favorable tax interpretations. And the firm is currently lobbying for a provision in the Tax Cuts and Jobs Act 2.0 that would reduce the corporate rate from 21% to 15%.

Gadwood would have to recuse himself from that too? Not necessarily. Ethics rules only require recusal for “particular matters involving specific parties.” General rulemaking, like drafting a regulation for passthrough income, is considered a “general matter” — meaning no recusal required, even if your former firm stands to profit.

In other words, Gadwood could shape IRS policy that directly benefits his former colleagues and clients, as long as he doesn’t personally handle their cases. Ethics experts call this the “swamp loophole,” and it’s legal.

The confirmation hearing, likely in January, will be a circus. Democrats will hammer the conflict-of-interest angle. Republicans will defend the pick as standard for a Republican administration. But the real question is whether any senators are brave enough to ask Gadwood: “Did you ever directly advise President Trump on his tax strategy?” If the answer is yes, he’s done.

If Gadwood is confirmed, expect the IRS to slow-walk enforcement against wealthy taxpayers, especially those with ties to Miller & Chevalier. The agency’s current enforcement rate against millionaires is already under 1% per year. That number could drop further. And if Trump wins a second term, Gadwood will be the one ensuring his tax returns stay secret — for good.

The Confirmation Fight Ahead

The Senate Finance Committee will hold the hearing sometime in early December. Chairman Ron Wyden (D-Ore.) has already called the nomination “tone-deaf” and promised a thorough vetting. But the committee has a 50-50 split, which means Vice President Harris could break any tie. That’s if the nomination even reaches the floor. A single senator could place a hold, though that’s rare for agency nominees.

Gadwood’s support in the tax community is mixed. Some former IRS officials privately say he’s a respected technician who knows the code better than anyone. Others see the nomination as a naked reward for loyalty. Miller & Chevalier has donated over $2 million to Trump’s campaigns and super PACs since 2015. That kind of financial overlap doesn’t go unnoticed.

The longer-term implications are worrying. If confirmed, Gadwood could serve up to five years as chief counsel. That means he’ll have a hand in writing the regulations that implement any new tax law passed in 2025 or 2026. Suppose Republicans extend the Trump tax cuts; Gadwood will be the one interpreting them. And suppose the Democrats try to close the carried interest loophole; Gadwood could narrow or broaden the exceptions.

In an era where the Supreme Court has already gutted the Chevron doctrine, leaving agencies less deference, the chief counsel’s interpretive role becomes even more powerful. Gadwood’s rulings could be the final word on tax disputes for years to come, and they could be appealed only to federal courts — many of which are now packed with Trump appointees.

The nomination is a test: Is the IRS an independent enforcement agency or a political tool? If Gadwood gets through, the answer will be clear. And the next time you file your taxes, you’ll know who’s writing the rules — and for whom.