Right now, individuals and businesses with deep pockets are feeling pretty good, thanks to the Trump administration. It’s been confirmed that these rich folks can still utilize those questionable tax shelters that help them dodge paying their fair share.
The Ministry of Finance has been surprisingly quiet about rolling back several rules from the Biden administration that attempted to make it tougher for agencies to uncover, audit, and take action against those using dubious tax shelters. As it stands, companies employing aggressive tax strategies don’t even have to declare them to authorities. Did we lose ground on this? Recent court rulings have penalized wealthy individuals using ineffective insurance tax schemes.
Instead of recuperating $100 billion over a decade by closing these loopholes, these big players can keep exploiting partnership tax rules to leverage tax avoidance credits as they see fit. Essentially, major corporations can acquire substantial equipment and then enjoy depreciation deductions for years, allowing them to shield their profits. But eventually, these deductions will run out. Still, the large corporations happily continue their “deduction party.” This shift, which relies on partnership tax rules, lets them transfer property among partner owners, thereby decreasing taxable profits or boosting tax losses.
Looking into these schemes requires an in-depth grasp of complex partnership tax laws and other tricky tax shelters favored by the wealthy. The IRS has been kind of drained when it comes to managing intricate audits; it basically gave up auditing private equity firms due to a lack of specialized personnel. This situation has only worsened since Trump took office. Earlier this year, a team of IRS lawyers that was concentrated on partnerships left. So now, tax cheats among the rich can expect a smoother path.
But if you’re an average person hoping for a bit of guidance from the IRS on filing your taxes, well, good luck with that. The IRS is shutting down nine taxpayer assistance centers as a move against former President Biden’s strategies. Under Biden, the agency had started utilizing funds from the Inflation Reduction Act to either open or reopen 54 of these centers.
Surely, there’s always the option to call the IRS for guidance, right? Well, that might be tricky. In order for the IRS to maintain their phone services, they would need to hire 11,000 customer service representatives for the 2026 tax season. Without that, agents can only manage to answer about 16% of incoming calls.
The agency isn’t looking to lay off any more staff, but since Trump took office, about 25,000 employees have already been let go. Currently, there’s a shortage in crucial areas, and they need to quickly rehire, reassign, and find volunteers willing to return to their positions.
At least those still working are occupied because they’ll be sharing tax data with the Department of Homeland Security to help Trump take action against immigrants. This is quite a breach of taxpayer privacy, according to IRS Commissioner Melanie Kraus, who has made it clear she’s not okay with it. Rather than resigning, she’s stuck with a data-sharing agreement that’s reportedly being used to identify individuals for deportation—somehow deemed legal because the administration says so.
Trump’s presidency seems geared towards rewarding his wealthy allies while punishing everyone else. Forcing the IRS to shift focus onto wealthy tax dodgers, while simultaneously involving them in Trump’s deportation efforts, seems like a strategy to achieve both goals.
