Profiles in Character #28 – Donald Alexander Insists Tax Laws Apply to Everyone

Confirmed as Internal Revenue Service (IRS) Commissioner in May 1973, Donald C. Alexander immediately became involved in a series of events that his undergraduate preparation at Yale and Harvard Law School education could hardly have imagined.  The day after being sworn in he learned of a secret team of IRS investigators, the Special Services Staff (SSS), charged with looking carefully through the tax returns of 3,000 “notorious” groups and 8,000 individual Americans.  The SSS was in part the brainchild of President Nixon’s White House Counsel John Dean, whose 1971 memorandum suggested the administration could “use the available federal machinery” to go after “our political enemies.”  By August 9th, Alexander had shut the unit down, saying in a later article that “political or social views, ‘extremist’ or otherwise, are irrelevant to taxation.”  As Alexander noted, “The evening of the same day, President Nixon made his first effort to fire me.”

Alexander would go on to defy pressure to audit those on Nixon’s “enemies list.”  He would, however, audit the president’s tax returns – but not out of malice.  When Nixon’s name came up for an audit via the IRS’s random process, Alexander alerted his boss, Secretary of the Treasury George Shultz.  When Schultz informed Al Haig, Nixon’s White House Chief of Staff, Haig called back in an hour,  According to Schultz, Haig told him “the president is at Camp David, and he is up the wall over this - - the IRS never audits a president.”  Alexander gathered evidence that several other presidents had been audited and the audit of Nixon went ahead.  In the midst of the Watergate scandal, Alexander would also turn over Nixon’s tax returns for 1969-1972 to meet the request of the Congressional Joint Committee on Taxation.  In the end, a special prosecutor investigation and the IRS’s work led to a determination that Nixon owed more than $400,000 in back taxes and penalties.

Alexander’s focus on the administration of tax laws was not limited to those in high office.  His much deeper concern was that the vast power of the IRS be used ethically and constitutionally.  He was shocked by some of the investigative methods he found were being used by IRS staff.  In one example, IRS investigators copied 400 documents in a banker’s briefcase after arranging for him to go on a date with a woman who gave them access to her apartment where his briefcase could be found.  Alexander considered this a violation of Fourth Amendment protections against unlawful search, a determination later upheld by the judge who threw out the IRS case. 

Alexander once also said that the IRS ran “a lending library” for private tax data and that governors were sometimes shown tax records of their political opponents.  In yet another case, in 1973 he stopped the audit of Senator Joseph Montoya, an investigation his staff had launched after the New Mexico Democrat started hearings on the IRS.

Donald Alexander was an American patriot.  He served as an Army forward artillery observer in the Second World War and received a Bronze Star and a Silver Star.  He sought not acclaim but that the nation’s tax laws be administered fairly.  In that quest, he campaigned for stricter taxpayer confidentiality laws, which Congress enacted in 1976, the year before he left the IRS the following February.

His public service did not end after he left the IRS.  He was later a member of several federal commissions, including the Martin Luther King, Jr. Federal Holiday Commission.  While serving as Director of the United States Chamber of Commerce, he also had a rather famous and fateful encounter with then-Secretary of the Interior, James Watt.  During a 1980 Chamber breakfast, Watt labeled his own department’s Coal Leasing Commission as having “every kind of mix you can have.  I have a black.  I have a woman, two Jews and a cripple.  And we have talent.”  Alexander confronted Watt over the remarks, and Watt later resigned when the controversy became public.

Donald Alexander was described as a “straight arrow” by Sheldon Cohen, an IRS Commissioner during the Johnson Administration.  Among his honors, he received the Treasury Department’s highest, the Alexander Hamilton Award, named after the nation’s first Treasury Secretary.

In 2002, Alexander reflected that he had met Nixon only one time, when he was at a White House concert in 1973.  “You have a very difficult job.  Do it well, and do it honestly,” he said the president had told him.  “Later those words came in very handy, “Alexander said.

Photo Credit: Associated Press