Trump's accounting firm caught in a bind as Trump Org tax fraud investigation ramps up: report
(L-R) Eric Trump, Donald Trump Jr., and Ivanka Trump and Donald Trump attend the ground breaking of the Trump International Hotel at the Old Post Office Building in Washington July 23, 2014. REUTERS/Gary Cameron

On Monday, Bloomberg Law reported that Mazars USA, the accounting firm that works with the Trump Organization, faces a critical dilemma as the tax fraud investigation into the former president's family business continues.

"The firm could opt to end its decades-long relationship with the Trump Organization. But walking away from a client doesn't end the firm's professional obligations nor would it halt inquiries into its past work for Trump's global real estate business," reported Amanda Iacone. "Mazars may be stuck with Trump for better or worse. In the short term, the criminal case in New York and an ongoing congressional investigation could stain the firm's reputation. Partners may leave, clients may switch to another CPA firm, revenues could slump."

"There's also an opportunity to bolster the firm's reputation and position among the 30 largest firms in the country by standing by its client and its work," continued the report. "'Accounting firms are going to have clients that have difficulties of one sort or another. And the test of whether or not this accounting firm could be a trusted business partner for a company is how they handle this situation,' said Jon Baumunk, accounting ethics lecturer at San Diego State University."

Mazars has already been the subject of subpoenas from a Manhattan grand jury for eight years of accounting information about the Trump Organization, and has complied with those requests. In August, a federal judge ruled that congressional investigators can also seek these records. This was a major blow to Trump, who in 2019 threatened to sue Mazars if it handed over this information.

Experts have long suspected the records from Mazars could be the key to unraveling wrongdoing at the Trump Organization, which has been accused of keeping two sets of records, inflating the value of their real estate holdings to get better deals on loans, while giving lower numbers to the IRS to avoid paying taxes.