Concerns Over IRS Practices Under Biden Administration

President Trump has taken significant steps to curb the IRS’s power, which many believe has turned into a tool for targeting political opponents. There’s a saying from Secretary John Marshall that “the power to tax is the power to destroy,” and it seems Democrats in the Biden IRS have embraced this notion. They’ve hired a myriad of new agents, sometimes focusing on businesses and wealthy Republican donors.

A figure like Lois Lerner, once known for her aggressive audits against conservative groups, remains a part of the agency’s operations. One particular rule that many see as problematic pertains to partnerships, a business structure that’s becoming increasingly common. For instance, companies like Microsoft rely on these partnerships for their revenue streams.

Partnerships play a vital role in the U.S. economy. A recent study by Ernst and Young highlights that around 10 million Americans are employed by such entities, contributing a solid $1.3 trillion to the GDP. The IRS seems to think that these partnerships aren’t paying enough.

Senator Ron Wyden, a prominent Democrat, is pushing to alter how partnerships are taxed. Proposed changes could potentially expose these businesses to more audits, even those deemed “innocent.” If they’re found liable for increased tax valuations, they could face significant penalties—upwards of 60% forfeiture.

While there is a need for clarity in these rules to prevent potential tax evasion, the proposed changes are moving forward without the necessary Congressional approval. Despite past promises from Trump’s administration to halt such rewrites, the current regulatory environment remains chaotic, especially with changing leadership at the IRS.

Additionally, Wyden has introduced legislation to formally establish these rules. Alarmingly, the Joint Committee on Taxation projects that these reforms could raise business taxes by $730 billion over the next ten years.

If left unchecked, the IRS could initiate the largest non-consensual tax hike in American history. The objective of the Trump administration was to reduce the tax burden on businesses, enhancing their global competitiveness rather than imposing an enormous tax increase.

At this point, it looks like someone, be it Trump or Treasury officials, needs to step in and address this looming tax threat to protect business interests and foster economic growth.