Three Democrats on the Senate Finance Committee are questioning Secretary of State Rex Tillerson’s tax deferral arrangement with ExxonMobil, where he was formerly chairman and CEO.

Sen. Ron Wyden, D-Ore., the ranking Democrat on the committee, along with two other Democrats on the committee, Tom Carper, D-Del., and Sherrod Brown, D-Ohio, sent a letter to Treasury Secretary Steven Mnuchin and IRS Commissioner John Koskinen urging them to closely examine Tillerson’s compensation arrangement to make sure it complies with the tax laws.

They expressed concern the deal would enable Tillerson to defer paying tens of millions of dollars in federal taxes over the next 10 years. The lawmakers encouraged the Trump administration to end such tax breaks in his tax reform plan. The Tax Policy Center estimates the wealthiest taxpayers would see their tax rate decline 7 percentage points if Trump’s tax reform plan is enacted into law.

“It appears that the tax position taken by ExxonMobil and Mr. Tillerson is aggressive at best and may evade current law,” Wyden, Carper and Brown wrote in their letter. “We ask that you closely scrutinize this arrangement to ensure compliance with current law. Furthermore, some aspects of the rules governing executive compensation arrangements are too loose and encourage aggressive tax planning. Therefore, we also ask that you review and tighten these rules in order to eliminate future abuse.”

Tillerson could potentially be avoiding “an immediate federal income tax bill of as much as $72 million” through this deferred compensation arrangement, according to a Bloomberg report (see Tillerson’s Exxon ethics plan has $72 million tax advantage).

ExxonMobil reportedly plans to cancel a restricted grant of ExxonMobil stock presently valued at over $170 million to Tillerson, they noted. As a substitute for the stock, which has not yet vested, ExxonMobil then plans to place a similar amount of cash into a trust with Tillerson as the beneficiary. The trust will make payments to him gradually over the next 10 years. The arrangement includes a noncompete clause saying that if Tillerson leaves government employment and becomes employed or otherwise engaged in the oil or gas industry, any assets left in the trust would be forfeited. The senators contend there is little risk of forfeiture, however.

According to Treasury regulations, “an enforceable requirement that the property be returned to the employer if the employee accepts a job with a competing firm will not ordinarily be considered to result in a substantial risk of forfeiture unless the particular facts and circumstances indicate to the contrary.” The lawmakers pointed out that Tillerson is 64 years old and will be Secretary of State for the “foreseeable future.” According to the trust agreement, in determining whether Tillerson violated the trust’s noncompete clause, the trustee is entitled “to rely conclusively, without investigation” on a certification by Tillerson.

“In other words, it is unclear whether and when Mr. Tillerson will exit government service and he is permitted under the terms of the trust to self-certify whether he has engaged in the activity that would trigger a forfeiture,” the senators wrote. “Therefore, it appears that the noncompete clause does not truly create a substantial risk of forfeiture and Mr. Tillerson should pay taxes currently on the full amount in the trust.”

They said the arrangement might technically fall outside the rules for nonqualified deferred compensation under Section 409A of the tax code, instead canceling one form of deferred compensation and essentially replacing it with another form that would be subject to more lenient conditions. If Tillerson’s restricted stock arrangement had been governed by Section 409A, the substitution could result in immediate taxation and a 20 percent tax penalty.

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.