President Donald Trump has done an admirable job at defanging the IRS, which was converted into a weaponized agency targeting Democrats’ political enemies.
Chief Justice John Marshall famously pronounced early in our nation’s history that “the power to tax involves the power to destroy.”
The Democrats inside the Biden IRS took that to heart. They hired thousands of new IRS agents to harass businesses, rich people, and, in some cases, Republican donors. Some of the officers under infamous former IRS enforcer Lois Lerner, the woman who aimed her agency’s auditing guns at conservative groups, are still active at the tax agency.
One of the most noxious of former President Joe Biden’s leftover regulatory rules applies to partnerships – an increasingly common form of business organization and expansion. Microsoft’s revenues/profits flow down through its business partners.
Business partnerships are vital contributors to the U.S. economy. A 2024 study by Ernst and Young for the Small Business Entrepreneur Council found that 10 million Americans work for these partnerships and generate $1.3 trillion in gross domestic product.
The IRS evidently thinks they are TOO successful.
A gang of holdovers from the Biden administration and the ranking Democrat on the Senate Finance Committee, Sen. Ron Wyden (Ore.), are trying to administratively change the taxation of pass-throughs and partnerships, and subject these entities to “guilty until proven innocent” audits.
The changes would alter the “economic substance doctrine,” which determines how the taxes on a business’s profits are applied to the partners. If the entities are found liable for increased tax assessments, they could face a giant tax bill AND a confiscatory 60% strict liability penalty.
These partnership rules are admittedly murky and may need updated protections against potential tax evasion abuses. But this rewrite of the tax laws would be applied without congressional approval. The Trump administration promised to end this illegal rewrite of the tax laws, but because of the turmoil at the IRS – with a revolving door of IRS commissioners – the Biden-era rules still stand.
Meanwhile, Wyden has introduced legislation to codify these new rules into law. Get this: The Joint Committee on Taxation scores these IRS “reforms” as a potential $730 billion business tax increase over the next decade.
If the IRS isn’t told to cease and desist, it could be the perpetrator of the largest non-congressionally approved tax increase in American history.
The Trump administration is supposed to be easing the tax burden on our businesses and employers to make them more globally competitive, not handing them a three-quarter-trillion-dollar tax INCREASE.
Trump or Treasury Secretary Scott Bessent should fix this tax raid on business before it reverses some of the job-creating benefits of Trump’s big beautiful bill.
Stephen Moore is a former Trump senior economic adviser and the cofounder of Unleash Prosperity, which advocates for education freedom for all children.
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Abolish the IRS. We need a flat tax. President Trump needs to completely defang the IRS if it is not abolished.
END this steal NO More
sooo the dems. programs and greed are still alive in the IRS.
relly sad
Shut down the IRS. It evidently is past the point of no “Return”!
Regarding “guilty until proven innocent” audits, that is NOT new. Audits have always been ‘guilty until proven innocent.” In Tax Court, the trial may shift back to “innocent until proven guilty.”
At the end of the article, I believe that “Trump’s big beautiful bill” should be capitalized: “One Big Beautiful Bill.”
Sounds like a hidden, back door, tax creeping up on us unaware’s. Someone in power, should alert the President, so he can do something about it.
It is difficult to distinguish these taxes from legalized theft. So far, we seem to have little recourse what with most of those politicians and their minions in D.C. and state legislatures. Most voters are merely fools at best.
As it seems the battle still ragging for Biden hold over! It will take time!
Fire Them all
my dad told me that there never was an income tax until 1861. Trump has the right idea about killing the scam and making foreigners who we protect pay tariffs to offset trade imbalances and reduce/eliminate the deficit.
Just like Democrats, the MEGA CORRUPT IRS is the American worker’s ARCH ENEMY.
Have read this article & I do understand why the IRS will get these taxes if they are not in the tax code for all businness or corporations. What am I missing here? And I always thought that Congress was in charge of any changes in IRS and taxes. This article sounds like the POTUS to do make changes to taxes & that is scary if true.
With “good” people such as Peter Thiel always at Trumps ear does anyone really expect to ever catch a break from our thieving federal overlords?
Corporations pull Trumps strings just as they do the strings of the majority of both houses of Congress.
We live in a textbook version of a fascistic state.