Foreign Information Returns & The IRS: When Time Limits Never Expire
Generally, the IRS has three years to select an income tax return for audit. But if the taxpayer never files an income tax return, the three-year statute of limitations period doesn't start, providing the agency with unlimited time to make additional tax adjustments. Although many taxpayers are familiar with this rule, few taxpayers recognize that a similar rule applies to unfiled foreign information tax returns.
Because there are numerous foreign information return obligations under federal tax law, it is fairly easy and even common for taxpayers to miss a filing deadline. In these instances, the statute of limitations for the IRS to make adjustments remains open indefinitely until the taxpayer files the information return and for three years thereafter. This extended statute of limitations period applies even if the taxpayer properly and timely filed an income tax return, although the extent of items subject to adjustment depends on whether the taxpayer had reasonable cause for the delinquent foreign information return.
Not all foreign information returns are subject to this extended statute of limitations rule. Specifically, section 6501(c)(8) only identifies eight information returns that extend the audit period, which include: (i) IRS Form 8621; (ii) IRS Form 5471; (iii) IRS Form 8865; (iv) IRS Form 926; (v) IRS Form 8938; (vi) IRS Form 3520 (but only for foreign trust reporting); (vii) IRS Form 3520-A; and (viii) IRS Form 5472. A summary of these foreign information returns follows.
U.S. persons with interests in passive foreign investment companies (PFICs) must generally file an IRS Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund. PFICs are foreign corporations that meet either an income test or an asset test. Under the income test, a foreign corporation qualifies as a PFIC if 75% or more of its gross income in a tax year originates from passive income (e.g., interest, dividends, etc.). A foreign corporation can also qualify as a PFIC under the asset test if at least 50% of its assets produce passive income or are held for the production of passive income. Under these tests, many foreign mutual funds qualify as PFICs.
U.S. persons with ownership or other interests in a foreign corporation must often file an IRS Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations. The reporting requirements for an IRS Form 5471 are some of the more complex foreign information reporting obligations under the Code as U.S. persons must determine whether they fall under one or more reporting categories (each of which requires the disclosure of certain information).
A common IRS Form 5471 reporting obligation arises when a U.S. person has 'control' over a foreign corporation—i.e., more than 50% of the vote or value of the corporation's stock. A lesser-known reporting category relates to U.S. persons who are officers or directors of a foreign corporation when a U.S. person acquires 10% or more of the corporation's stock in a tax year.
For more information on IRS Form 5471, see here.
There is also a foreign information return requirement for U.S. persons who have ownership or other interests in foreign partnerships. Similar to the IRS Form 5471 reporting requirements, the IRS Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, must be filed if a U.S. person falls within one or more reporting categories. For example, a U.S. person is a category one filer if the person controls the foreign partnership at any time during the partnership's tax year. For these purposes, control means more than 50% of the profits or capital interests of the partnership or 50% of the deductions or losses. In addition, U.S. persons must file an IRS Form 8865 if they make certain contributions to foreign partnerships in a tax year, provided the person has at least a 10% interest in the partnership and meets a specified dollar threshold.
U.S. persons who make certain contributions to foreign corporations or who enter into reorganization transactions with a foreign corporation party must file IRS Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation.
For more information on IRS Form 926, see here.
U.S. persons with interests in 'specified foreign financial assets' must usually file an IRS Form 8938, Statement of Specified Foreign Financial Assets. Generally, a 'specified foreign financial asset' includes: (i) foreign financial accounts (e.g., banking or investment accounts); (ii) ownership in foreign entities (e.g., partnerships and corporations); (iii) debt issued by foreign persons; and (iv) interests in foreign trusts and estates.
For more information on IRS Form 8938, see here.
U.S. persons who make contributions to or receive distributions from a foreign trust must report these transactions on IRS Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. In addition, U.S. persons who are treated as grantors or deemed owners of foreign trusts must file an IRS Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner.
For more information on IRS Form 3520, see here
For more information on IRS Form 3520-A, see here.
Certain corporations (domestic and foreign) and certain foreign-owned U.S. disregarded entities must file an IRS Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. For example, a U.S. corporation with at least one foreign person who owns 25% or more of the corporation's vote or value must file an IRS Form 5472.
For more information on IRS Form 5472, see here.
Taxpayers who fail to timely file any one or more of these foreign information returns are subject to extended statute of limitations periods. Worse yet, the statute of limitations period for the IRS to conduct an audit never expires if the taxpayer fails to file the applicable foreign information return. Taxpayers interested in regaining compliance should consult with a tax professional as there are IRS programs available that may provide relief for delinquent foreign information returns, including the Streamlined Filing Compliance Procedures.
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Yahoo
an hour ago
- Yahoo
Will the 2026 tax season start late? IRS commissioner sparks speculation
Sure, we're in back-to-school season, but tax pros already are speculating about the potential for a delayed start for the 2026 tax season. The buzz began building after Billy Long, the new IRS commissioner, was quoted in a July 29 article in The Tax Adviser, a monthly publication of the American Institute of CPAs, as well as the Journal of Accountancy. Long said that the 2026 filing season should start around Presidents Day, which is on Monday, Feb. 16 next year. Gulp, are we talking about a potential three-week delay here? Which could mean many early filers would have to wait even longer for their tax refunds? Not so fast, says the IRS in a statement issued after Long made his comments during a Q&A session at the 2025 Tax Summit of the National Association of Enrolled Agents in Salt Lake City. We're being told that things might not be that dire after all. This year, Internal Revenue Service began accepting and processing individual federal income tax returns on Jan. 27. Kicking off the tax season on Feb. 16 would mean we're talking about a roughly three-week delay. According to the article in the Tax Adviser, Long said he pushed for an earlier date but said that IRS staff wanted more preparation time. Long claimed that he was told staff would "need every day in there. But they have this thing down." Not surprisingly, the IRS seemed to back off that claim, according to an IRS statement in an article that Politico posted online Aug. 4. Tax Notes, a publication for tax professionals, posted the same IRS statement in its story online Aug. 5 with the headline "IRS walks back commissioner's filing season prediction." What IRS says now about next year's tax season The IRS statement on the tax filing date, which I later received by email as well, didn't deny Long's comments but offered some hope if you read between the lines. 2025 tax rules: Trump's new tax deduction on auto loans has major limitations: What car buyers should know The statement, first issued July 30 according to the IRS, concluded: "The IRS looks forward to another successful tax filing season next year, and we will announce the timing of its opening in the regular course." According to the July 30 statement, "IRS Commissioner Billy Long is in his second week of a 'boots on the ground' tour of IRS facilities with visits last week in Georgia and this week in Utah." The IRS said: "Billy cares about two groups of people: his employee-partners and taxpayers. He is gathering information on what enhancements can be made to provide an exceptional taxpayer experience for the American people." No kickoff date is set in stone yet. Last year, the IRS issued a news release on Jan. 10 to state that the 2025 tax season would start on Monday, Jan. 27, 2025. When will the IRS begin accepting tax returns? It's a popular question that readers search for online as the calendar year comes closer to an end. But remember, we likely have five months to go from now before the IRS announces when the agency will begin accepting and processing more than 140 million individual income returns for the 2025 tax year. My guess? The speculation has only just begun. Fingers crossed, and it will all work out. Don't bet too heavily against the possibility for at least a few glitches along the way. Some tax professionals remain cautiously optimistic Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting in Riverwoods, Illinois, told me that the good news for the IRS is that the "One Big, Beautiful Bill Act" passed in early July instead of the end of December. "This would normally give the IRS time to prepare for the filing season," Luscombe said. Yet, there are potential glitches, he said. First, the IRS is dealing with significant staff reductions. Luscombe said it's hard to know whether staff reductions affected some key positions at the IRS. But he suggested that if IRS staff at one point told the IRS commissioner that the start of the filing season would probably need to be delayed well into February, then "that is an indication that the staff is concerned about being ready in time for the start of the tax season." On top of that, Luscombe said, Congress is talking about the possibility of another tax bill this year, which could potentially hit late in the year and also affect the start of tax filing season. "If the IRS staff says they need until Presidents Day in 2026, I would take them at their word, which would also mean delayed refunds compared to other more recent years," Luscombe said. No doubt, the IRS will do all it can within its power to avoid the uproar that would take place with any Presidents Day launch. "My interpretation of last week's comments is that the IRS is concerned but still trying to avoid a long delay," said Janet Holtzblatt, senior fellow for the Urban-Brookings Tax Policy Center in Washington, D.C. If the launch of the filing season is delayed, she said, it will more likely be due to the 25% reduction in IRS staff than to the tax law changes and new deductions in the one big bill. "The legislation was signed on July 4, which typically would give the IRS sufficient time to implement the new legislative provisions," she said. Typically, when the IRS has had to delay the kickoff date for the tax season, she said, it has been after Congress enacts tax legislation very late in the year. Often, some delays are limited to very specific complicated provisions associated with the new tax laws. For example, she said, the American Taxpayer Relief Act was enacted on Jan. 2, 2013, and had some retroactive provisions for 2012 returns. In that case, the filing season officially began on Jan. 30, 2013, but the IRS began accepting 2012 returns in various phases as it worked quickly to update forms and instructions to reflect the new law. The tax season essentially was delayed for some filers claiming particular tax breaks on 2012 returns. In 2013, for example, the IRS began accepting tax returns on Feb. 10 from people claiming depreciation deductions. Taxpayers claiming education credits had to wait until Feb. 14. "It wasn't until March 4 that everyone could file," Holtzblatt said. The IRS had to reprogram and test its systems for tax year 2012, including all updates required by the American Taxpayer Relief Act enacted by Congress in January 2013. In recent years, Holtzblatt said, the latest opening day for tax season occurred during the pandemic. The 2021 filing season did not begin until Feb. 12. "If the filing season is delayed, refunds will also be delayed," she said. "Perhaps, the IRS can still manage to avoid long delays, but the task will be challenging with a 25% reduction in staff and a remaining workforce that may well be demoralized." We're talking about more than one big change in tax rules that will impact 2025 tax returns — a new tax deduction of up to $6,000 for those age 65 and older who qualify; a tax deduction on overtime pay; a tax deduction on the interest paid on new car loans, and more. "The fact that there are changes in the law that impact this tax year means the IRS and Treasury must work diligently to both send out appropriate guidance to taxpayers and prepare for changes to filing to accommodate those changes next spring," said Garrett Watson, director of policy analysis at the nonpartisan Tax Foundation. Once again, we don't actually know when the 2026 tax season will start. The IRS typically isn't announcing the start of filing season in the summer just days before school starts. But this summer, we all started talking about one big bill and tax breaks around the Fourth of July. So, I guess it's natural that some soon will be asking once again: When does the IRS begin accepting tax returns? Sort of like seeing artificial Christmas trees sprout up for sale in October. Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor. This article originally appeared on Detroit Free Press: IRS hints at Presidents Day start for 2026 tax season
USA Today
an hour ago
- USA Today
Will the 2026 tax season start late? IRS commissioner sparks speculation
Sure, we're in back-to-school season, but tax pros already are speculating about the potential for a delayed start for the 2026 tax season. The buzz began building after Billy Long, the new IRS commissioner, was quoted in a July 29 article in The Tax Adviser, a monthly publication of the American Institute of CPAs, as well as the Journal of Accountancy. Long said that the 2026 filing season should start around Presidents Day, which is on Monday, Feb. 16 next year. Gulp, are we talking about a potential three-week delay here? Which could mean many early filers would have to wait even longer for their tax refunds? Not so fast, says the IRS in a statement issued after Long made his comments during a Q&A session at the 2025 Tax Summit of the National Association of Enrolled Agents in Salt Lake City. We're being told that things might not be that dire after all. This year, Internal Revenue Service began accepting and processing individual federal income tax returns on Jan. 27. Kicking off the tax season on Feb. 16 would mean we're talking about a roughly three-week delay. According to the article in the Tax Adviser, Long said he pushed for an earlier date but said that IRS staff wanted more preparation time. Long claimed that he was told staff would "need every day in there. But they have this thing down." Not surprisingly, the IRS seemed to back off that claim, according to an IRS statement in an article that Politico posted online Aug. 4. Tax Notes, a publication for tax professionals, posted the same IRS statement in its story online Aug. 5 with the headline "IRS walks back commissioner's filing season prediction." What IRS says now about next year's tax season The IRS statement on the tax filing date, which I later received by email as well, didn't deny Long's comments but offered some hope if you read between the lines. 2025 tax rules: Trump's new tax deduction on auto loans has major limitations: What car buyers should know The statement, first issued July 30 according to the IRS, concluded: "The IRS looks forward to another successful tax filing season next year, and we will announce the timing of its opening in the regular course." According to the July 30 statement, "IRS Commissioner Billy Long is in his second week of a 'boots on the ground' tour of IRS facilities with visits last week in Georgia and this week in Utah." The IRS said: "Billy cares about two groups of people: his employee-partners and taxpayers. He is gathering information on what enhancements can be made to provide an exceptional taxpayer experience for the American people." No kickoff date is set in stone yet. Last year, the IRS issued a news release on Jan. 10 to state that the 2025 tax season would start on Monday, Jan. 27, 2025. When will the IRS begin accepting tax returns? It's a popular question that readers search for online as the calendar year comes closer to an end. But remember, we likely have five months to go from now before the IRS announces when the agency will begin accepting and processing more than 140 million individual income returns for the 2025 tax year. My guess? The speculation has only just begun. Fingers crossed, and it will all work out. Don't bet too heavily against the possibility for at least a few glitches along the way. Some tax professionals remain cautiously optimistic Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting in Riverwoods, Illinois, told me that the good news for the IRS is that the "One Big, Beautiful Bill Act" passed in early July instead of the end of December. "This would normally give the IRS time to prepare for the filing season," Luscombe said. Yet, there are potential glitches, he said. First, the IRS is dealing with significant staff reductions. Luscombe said it's hard to know whether staff reductions affected some key positions at the IRS. But he suggested that if IRS staff at one point told the IRS commissioner that the start of the filing season would probably need to be delayed well into February, then "that is an indication that the staff is concerned about being ready in time for the start of the tax season." On top of that, Luscombe said, Congress is talking about the possibility of another tax bill this year, which could potentially hit late in the year and also affect the start of tax filing season. "If the IRS staff says they need until Presidents Day in 2026, I would take them at their word, which would also mean delayed refunds compared to other more recent years," Luscombe said. No doubt, the IRS will do all it can within its power to avoid the uproar that would take place with any Presidents Day launch. "My interpretation of last week's comments is that the IRS is concerned but still trying to avoid a long delay," said Janet Holtzblatt, senior fellow for the Urban-Brookings Tax Policy Center in Washington, D.C. If the launch of the filing season is delayed, she said, it will more likely be due to the 25% reduction in IRS staff than to the tax law changes and new deductions in the one big bill. "The legislation was signed on July 4, which typically would give the IRS sufficient time to implement the new legislative provisions," she said. Typically, when the IRS has had to delay the kickoff date for the tax season, she said, it has been after Congress enacts tax legislation very late in the year. Often, some delays are limited to very specific complicated provisions associated with the new tax laws. For example, she said, the American Taxpayer Relief Act was enacted on Jan. 2, 2013, and had some retroactive provisions for 2012 returns. In that case, the filing season officially began on Jan. 30, 2013, but the IRS began accepting 2012 returns in various phases as it worked quickly to update forms and instructions to reflect the new law. The tax season essentially was delayed for some filers claiming particular tax breaks on 2012 returns. In 2013, for example, the IRS began accepting tax returns on Feb. 10 from people claiming depreciation deductions. Taxpayers claiming education credits had to wait until Feb. 14. "It wasn't until March 4 that everyone could file," Holtzblatt said. The IRS had to reprogram and test its systems for tax year 2012, including all updates required by the American Taxpayer Relief Act enacted by Congress in January 2013. In recent years, Holtzblatt said, the latest opening day for tax season occurred during the pandemic. The 2021 filing season did not begin until Feb. 12. "If the filing season is delayed, refunds will also be delayed," she said. "Perhaps, the IRS can still manage to avoid long delays, but the task will be challenging with a 25% reduction in staff and a remaining workforce that may well be demoralized." We're talking about more than one big change in tax rules that will impact 2025 tax returns — a new tax deduction of up to $6,000 for those age 65 and older who qualify; a tax deduction on overtime pay; a tax deduction on the interest paid on new car loans, and more. "The fact that there are changes in the law that impact this tax year means the IRS and Treasury must work diligently to both send out appropriate guidance to taxpayers and prepare for changes to filing to accommodate those changes next spring," said Garrett Watson, director of policy analysis at the nonpartisan Tax Foundation. Once again, we don't actually know when the 2026 tax season will start. The IRS typically isn't announcing the start of filing season in the summer just days before school starts. But this summer, we all started talking about one big bill and tax breaks around the Fourth of July. So, I guess it's natural that some soon will be asking once again: When does the IRS begin accepting tax returns? Sort of like seeing artificial Christmas trees sprout up for sale in October. Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor.
New York Times
2 hours ago
- New York Times
The Auctioneer and the Treasury Chief: How Billy Long Fell Short at the I.R.S.
The meeting between Billy Long and President Trump in the gilded Oval Office last month was supposed to mark a victory for both men. For Mr. Trump, the ceremonial swearing-in of Mr. Long to his role as the commissioner of the Internal Revenue Service underscored that he at last had a political loyalist and friend, rather than the typical technocrat, at the head of the powerful tax agency. For Mr. Long, a former Republican congressman from Missouri, it signified the completion of a political comeback. After Mr. Long suffered a dismal showing in Missouri's 2022 Republican Senate primary, his unwavering and, at times, over-the-top support for Mr. Trump had finally panned out. As members of his family and close aides from his time in Congress looked on, he was put in charge of one of the federal government's most visible and fundamental agencies, responsible for collecting roughly $5 trillion in tax revenue each year. By all appearances, Mr. Long had the full support of the president, who had also invited him to a private lunch that day and structured the July 18 swearing-in around it. But within days, Mr. Long began to lose his grip on a job that he had held for barely a month. Treasury Secretary Scott Bessent had already ousted one White House-installed I.R.S. commissioner this year. He would soon orchestrate the removal of another, culminating in the agency having its seventh leader since January. At the center of Mr. Bessent's concerns was the fact that Mr. Long had been trying to put together an independent plan for the I.R.S. without informing the Treasury Department, according to five people familiar with the matter. But Mr. Long's vision for the I.R.S. had at least in part been shaped by Mr. Trump. Over their lunch, Mr. Trump suggested people at the I.R.S. whom Mr. Long should fire, while Mr. Long told the president he wanted to elevate a Treasury staff member brought in as part of the Department of Government Efficiency, Sam Corcos, to become his No. 2. Stephen Miller, Mr. Trump's powerful aide, at one point stopped by the meeting. Soon after the lunch, the working relationship between Mr. Bessent, a multimillionaire former hedge fund manager, and Mr. Long, a former auctioneer without a college degree, began to break down. Mr. Long remarked to colleagues, as well as the president, that he had to ask Mr. Bessent for permission for everything he wanted to do at the I.R.S. Mr. Long said he wondered why he had been asked to do the job in the first place, according to people who heard the remark. Treasury officials, after some public gaffes from Mr. Long, began to doubt that he possessed the basic discipline to do the demanding and heavily scrutinized job. Several people in the president's orbit also questioned whether Mr. Long was up to the task. Over several weeks, Trump administration officials discussed alternative roles for Mr. Long, and eventually, Sergio Gor, the White House personnel director, informed Mr. Long that he would be moving to a new job, two people briefed on the matter said. Last Friday, Mr. Long said he would leave the I.R.S. and be nominated to become the next ambassador to Iceland. Mr. Long ultimately lasted less than two months at the I.R.S., the latest in a chaotic stretch at the tax agency. Mr. Bessent has temporarily taken over the position. In a statement in response to the reporting for this article, a White House spokesman, Harrison Fields, said that Mr. Long was a 'steadfast ally' and that the president was 'surrounded by highly talented patriots united in advancing his historic and successful agenda.' A Treasury spokesperson said Mr. Long's 'enthusiasm and ability to connect with people' had helped morale at the I.R.S. 'We appreciate his efforts to help kick-start the long overdue modernization of the technical systems within I.R.S. and implement President Trump's One Big Beautiful Bill,' the spokesperson said. Mr. Long and the I.R.S. did not respond to requests for comment. This article is based on interviews with more than a dozen current and former officials at the I.R.S., at the Treasury, at the White House and on Capitol Hill who were granted anonymity to discuss the personnel changes. They described a territorial Treasury secretary in Mr. Bessent who has sought total control of the beleaguered I.R.S., a neophyte administrator in Mr. Long who stumbled during his brief tenure and a rudderless tax agency that is scrambling to execute on its mission amid the leadership turmoil and deep staff cuts this year. 'You say you're concerned about the debt and the deficit and at the same time you're creating chaos at the revenue collection agency,' said John Koskinen, who led the I.R.S. during the Obama and first Trump administrations. 'This is a complex system.' 'Upbeat, Friendly and Open' Mr. Long had almost no background in tax policy or running large organizations when he stepped into the I.R.S. job in mid-June after the Senate confirmed him along party lines. What he lacked in experience he seemed to try to make up for in charisma. He traveled to I.R.S. offices around the country and held early-morning office hours in Washington, inviting employees to sign up to meet with him individually for 10 minutes. He sent regular, playful missives to the full I.R.S. staff, telling workers about the books on leadership he was reading and repeatedly sending staff members home early on Friday, or 'FriYay,' as he called it. 'I used to teach a class on UFOs: 'Upbeat, Friendly and Open.' That's the way I plan to operate, and I hope you'll join me,' he wrote in his first email to the staff, which was viewed by The New York Times. For I.R.S. workers, Mr. Long's attitude was in some ways a welcome change. The period since Mr. Trump took office in January had been marked by upheaval and constant turmoil. In addition to the nearly constant reshuffling of the executive suite, the I.R.S. had also lost roughly 25,000 employees, a quarter of its staff, as the Trump administration razed the ranks of the federal work force. Mr. Long told employees that he did not want to even discuss the possibility of further large-scale staff cuts to the agency. There were still doubts among the rank and file, though. The only tax work Mr. Long had ever done was pitching small businesses, nonprofits and friends on a pair of tax credits — one riddled with fraud that the I.R.S. had been trying to close down and another that the agency has said does not exist. Under the handle @auctnr1, he posted on social media constantly, regularly amplifying posts from conservative accounts attacking Democrats and even I.R.S. employees. He had abruptly put on leave two senior I.R.S. officials targeted by conservative, anti-tax activists. His attempts to curry favor with the staff at times caused issues. I.R.S. managers were forced to scramble to schedule the early dismissals. Some employees continued to work overtime as they tried to clear a backlog of international tax returns and correspondence. 'He did not have a very good understanding of the organization or how it operates or the necessary steps to meet the mission,' said Doreen Greenwald, the president of the National Treasury Employees Union. 'So, that was concerning early on, but obviously I.R.S. employees care deeply about the success of the organization. They were willing to work with him.' He also made errors. At a conference of tax professionals in Utah in July, Mr. Long said next year's tax filing season would start later than normal, a sign of potential disarray at the agency that would come with real repercussions. Such a change would delay the ability of millions to receive their annual tax refunds, a vital source of cash for low-income Americans. He also said the agency's Direct File program, which allows Americans to file their taxes online with the I.R.S. for free, was dead. The agency had to walk back both remarks. A Power Struggle Mr. Long's statements in Utah added to frustrations at the Treasury Department, where there were concerns that the commissioner did not properly appreciate that the I.R.S. fell under the umbrella of the Treasury. The I.R.S. is the largest single component of the Treasury Department, making up more than 70 percent of its budget. But in the second Trump administration, officials from around the government have sought to tap into the tax agency's vast powers. The Department of Homeland Security has pushed the I.R.S. to share typically confidential taxpayer records it keeps on undocumented immigrants, a process that began last week after months of legal wrangling. Mr. Trump also called for the I.R.S. to strip Harvard of its tax-exempt status, an attempt to use the agency's auditing powers to put pressure one of the president's political foils. In April, Mr. Bessent had to wrest control of the agency back from Elon Musk, who had Mr. Trump install a temporary commissioner at the I.R.S. without consulting the Treasury secretary. Mr. Bessent protested to Mr. Trump, who ultimately acquiesced, saying Mr. Bessent could fire Mr. Musk's pick, Gary Shapley, after he had led the I.R.S. for just a couple of days. The flap led to a physical confrontation between Mr. Bessent and Mr. Musk in the West Wing, according to multiple people briefed on what took place. Over his short tenure, Mr. Long made clear that he hoped to put his own mark on the job. He wanted to plan his own events, and in July he attended the National Auction Association's annual conference, held outside Chicago. Mr. Long, a member of the association's hall of fame, held a session at the conference, titled 'View From the I.R.S.' At one point, he auctioned off a tie that he had signed, with the proceeds going to charity. 'He's been doing that for as long as I can remember,' said Mike Jones, an auctioneer and friend of Mr. Long's who said he could not recall how much the tie had sold for. Mr. Long had at various points floated to Treasury employees the possibility of running the I.R.S. from his hometown in Springfield, Mo., according to people familiar with the remark. Just days before he would step down from the job last week, a phone call Mr. Long had set up with Representative Richard E. Neal, the top Democrat on the Ways and Means Committee, was abruptly rescheduled. An I.R.S. representative had told Mr. Neal's staff that Mr. Long could not be found in time for the original call. The I.R.S. is in the middle of trying to put in place the new tax law Republicans passed last month, a process that includes ironing out the final details of Mr. Trump's campaign promises to not tax overtime or tips, among others. That work is proceeding without Mr. Long, though plans to post a happy birthday message on the internal I.R.S. website for Mr. Long's 70th birthday on Monday were quietly abandoned. Mr. Long, for his part, has appeared unbothered by the quick end to his time running the I.R.S., writing on social media that he was 'thrilled' to be nominated to become the next ambassador to Iceland. Mr. Long has long celebrated just about everything about Mr. Trump, claiming to have coined the term 'Trump train' and distributing fake $45 bills with the president's face during his first term. 'I was never much of a fighter, but I'm loyal to a fault,' Mr. Long wrote to I.R.S. employees on July 25. 'Loyal to my family, my employees partners and my industry. I will stand up and fight for those I'm loyal to.' Alan Rappeport contributed reporting from Washington.
