Title: Diving into Tax Breaks: A Unique Perspective for 2025's Tax Season
It seems like tax season is off to a peculiar start in 2025. Unlike past years, where the rush to open tax season had the same energy as a kid on the first day of school, this year things are different. The IRS news website hasn't been updated in over a week, and there's a noticeable lack of excitement in the air.
The change in administration from Biden to Trump might be the reason for this shift. Last week, IRS Commissioner Werfel announced his departure, and Trump nominated Congressman Billy Long to replace him. Long, who has no background in tax, accounting, or law, is yet to attend his confirmation hearing. In the meantime, Deputy IRS Commissioner Douglas O'Donnell is acting as Commissioner, but there's been no formal welcome or introduction from him.
The fluctuating political landscape isn't the only challenge the IRS is facing. President Trump has signed an executive order requiring federal employees, including IRS employees, to return to work "as soon as practicable" on a full-time basis. This could potentially lead to a wave of resignations, leaving the IRS understaffed during a critical time.
Furthermore, Trump has issued an order freezing hiring for most federal agencies, with the exception of the IRS. The freeze is intended to be temporary, but within 90 days, the Director of the Office of Management and Budget must submit a plan to reduce the government's workforce size. For the IRS, the hiring freeze will remain in place until the Secretary of the Treasury determines it's in the national interest to lift it.
The IRS was actively hiring with funding from the Inflation Reduction Act before the announcement. With the tax season set to open next week, a hiring freeze could have an immediate impact, potentially causing longer processing times and delayed refunds for taxpayers.
Tax policy is also a hot topic this week. Trump signed a presidential memorandum directing the cancellation of any commitments related to the global tax deal made by the previous administration. This could pose problems for the OECD and U.S. foreign relations moving forward.
Another executive order ended birthright citizenship in certain circumstances. This has far-reaching implications, including from a tax and estate planning perspective. Legal challenges have already been filed to halt the implementation of this order.
The Supreme Court has ruled on the Corporate Transparency Act, granting the government a stay of a Texas ruling that blocked beneficial ownership interest reporting requirements. However, another Texas court issued a preliminary injunction and stay that prevents FinCEN from enforcing the new law. The legal drama continues, but businesses don't need to rush to file just yet.
In other news, the Tax Breaks podcast is set to launch next week, with special guests and value-adds beyond the usual tax news and info. Stay tuned for more details!
- The change in IRS leadership, with President Trump nominating Congressman Billy Long to replace Danson Werfel, has raised concerns about the tax stats during the 2025 tax filing season.
- Kelly Phillips Erb, a tax expert, has suggested that the lack of beneficial ownership information could hinder the IRS's ability to enforce tax laws effectively, especially with the ongoing legal drama surrounding the Corporate Transparency Act.
- During the 2025 tax filing season, President Trump's orders to return federal employees to work full-time and freeze hiring for most federal agencies could lead to staff shortages at the IRS, potentially causing delays in tax processing and refunds.
- Tax policy discussions continue to dominate headlines, with President Trump's orders to cancel commitments related to the global tax deal and ending birthright citizenship in certain circumstances having far-reaching implications, including potential tax and estate planning consequences.
- In a positive development, the Tax Breaks podcast, hosted by tax experts, is set to launch next week, offering valuable insights and information beyond the usual tax news to help taxpayers navigate the complex tax landscape during the 2025 tax filing season.
