Finance Democrats seek assurances from Treasury nominee Bessent on taxes ahead of vote

Caitlin Reilly, CQ-Roll Call on Jan 20, 2025

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WASHINGTON — Senate Finance ranking member Ron Wyden and other committee Democrats are pressing Scott Bessent, President Donald Trump’s intended nominee for Treasury secretary, to submit to an IRS audit and release his tax filings ahead of the panel’s vote on his nomination Tuesday.

The Oregon Democrat, along with Senate Banking ranking member Elizabeth Warren, D-Mass., and Sen. Sheldon Whitehouse, D-R.I., sent a letter Monday with the requests, citing reports on a confidential memo prepared by Finance Democratic staff raising issues with the hedge fund manager’s tax filings for the previous three years.

The memo accused the billionaire nominee of avoiding more than $900,000 in self-employment taxes, as well as claiming other deductions that Democratic staff deemed questionable. Senate Finance Chairman Michael D. Crapo, R-Idaho, along with a spokesperson for Trump’s transition team defended Bessent, saying he followed the law and handled his taxes in keeping with advice from major law and accounting firms.

In addition to releasing his tax filings and voluntarily submitting to an audit, the three Democrats asked Bessent to recuse himself from discussions or decisions at Treasury related to the tax issues identified by the staff memo. And they asked him to continue IRS enforcement initiatives focused on complex partnerships, big corporations and wealthy individuals. Those actions are needed to allow Bessent to “effectively” and “credibly” serve as Treasury secretary, they said in the letter.

The staff memo, which surfaced ahead of Bessent’s confirmation hearing, said the billionaire avoided more than $900,000 in Medicare taxes on income from his hedge fund, the Key Square Group. Bessent took the position that as a limited partner in the fund under state law, he was not liable for taxes on certain income earned through the fund, according to the memo.

His active involvement in the fund made that stance out of step with positions recently taken by the Treasury Department on the tax liability of limited partners, Democratic staff said in the memo. They also took issue with deductions that Bessent took related to losses in All Seasons Press, a right-leaning publishing house he owns.

During his confirmation hearing last week, Bessent said in response to a question from Whitehouse that the issue was subject to litigation but disputed the numbers cited by the Democratic staff memo, saying the amount in question was lower. The nominee said if confirmed he would wind down his hedge fund, set aside the amount under dispute and pay it if ordered to do so by the court.

While Democrats largely avoided the memo’s contents during Bessent’s hearing, Monday’s letter indicates some may still try to make an issue of it ahead of his confirmation.

The Finance Committee is scheduled to vote on Bessent’s nomination Tuesday morning, clearing the way for a quick confirmation vote on the floor. Wyden, Warren and Whitehouse asked Bessent to commit to their requests in writing ahead of the committee vote.