The IRS's covert $700 billion tax hike: Cease and desist!
The Biden administration's efforts to alter the tax rules for pass-throughs and partnerships in the United States have sparked concerns, as these changes could potentially result in the largest tax increase without congressional review in American history.
According to the Joint Committee on Taxation, these IRS 'reforms' could potentially lead to a $730 billion business tax increase over the next decade. This move, initially intended to ease the tax burden on businesses, could instead impose a three-quarter-trillion-dollar tax increase on them.
The economic substance doctrine, which determines how taxes on a business's profits are applied to the partners, is at the heart of these changes. The IRS, under the Biden administration, has hired thousands of new agents to enforce these rules, sparking concerns about potential harassment of businesses, rich individuals, and Republican donors.
Stephen Moore, a former Trump senior economic adviser and the co-founder of Unleash Prosperity, an organization advocating for education freedom for all children, is vocal in his opposition to these changes. He refers to this potential tax increase as a 'raid on business.'
The changes could result in increased tax assessments and a strict liability penalty of 60%. This 'guilty until proven innocent' audit approach has raised eyebrows, particularly given the IRS's history of controversial practices.
It's important to note that business partnerships contribute significantly to the U.S. economy, employing 10 million Americans and generating $1.3 trillion in GDP. Microsoft, for example, relies on its business partners for a significant portion of its revenues and profits.
The IRS rewrite of the tax laws is being done without congressional approval, a move that has been criticized by many. Some argue that this lack of oversight could lead to unintended consequences for the economy.
The Biden-era IRS rules, which could result in a significant business tax increase, are still in effect due to a revolving door of IRS commissioners under the Trump administration. This continuity has fueled concerns that the changes may become permanent without proper scrutiny.
The actions of the IRS under the Biden administration are not without precedent. Chief Justice John Marshall famously stated that the power to tax involves the power to destroy. This principle has been a guiding force in debates about the IRS's powers for centuries.
The Trump administration's actions, particularly in reducing the IRS's power to target political enemies, have also played a role in this ongoing saga. However, the potential reversal of some of the job-creating benefits of Trump's big beautiful bill through these tax changes is a cause for concern.
Some officers under former IRS enforcer Lois Lerner, who was accused of targeting conservative groups, are still active at the tax agency. This history of controversial practices has added to the public's distrust of the IRS and its motives.
In conclusion, the IRS's attempts to administratively change the taxation of pass-throughs and partnerships without congressional approval has sparked a heated debate. If the IRS isn't stopped, it could be responsible for the largest non-congressionally approved tax increase in American history.
The opinions expressed in this article are those of Stephen Moore and do not necessarily represent the views of Unleash Prosperity or Action.
This article was copyrighted in 2025 by Creators.com.
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