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NBC News
4 hours ago
- Business
- NBC News
Trump says his new high tariffs are going 'very well, very smooth' — but he's open to more deals
WASHINGTON — President Donald Trump touted the expansive new tariffs on imports he imposed on global trading partners Thursday night, telling NBC News in a phone interview that it all was going "very well, very smooth." He also said that with just a few hours before his self-imposed midnight deadline for trade deals, it was "too late" for other countries to avoid tariff rates set to snap in place next week, which he formalized in a new executive order. But, he added, his door will always be open to compelling offers: "It doesn't mean that somebody doesn't come along in four weeks and say we can make some kind of a deal." In Thursday's executive order, Trump made official his agreements with trading partners such as the European Union, Japan, South Korea, the United Kingdom and the Philippines. Trump's order unilaterally sets rates for countries that did not reach agreements with him. For example, Switzerland's rate will be set higher than previously threatened, at 39%, while Taiwan's will be set lower, at 20%. Trump boasted of the tariff revenue the U.S. is already taking in — $26 billion in June, according to Treasury Department figures — and said there would be much more to come. 'We will be taking in hundreds of billions of dollars and very quickly,' he said. Asked if he's worried about potential price spikes on imported goods, Trump replied, 'The only price that's spiked is the hundreds of billions of dollars coming in.' Trump indicated that he was open to further discussions with Canada, and said he may even speak to Prime Minister Mark Carney later Thursday night, but he said he wouldn't make a new deal with the country before the deadline. Trump also said he was unfamiliar with Brazilian President Lula de Silva's recent New York Times interview suggesting Brazil was prepared to dig in and push back against the U.S. tariff program. Told of its tenor, the president responded, 'That's OK. But he doesn't have to do business with the United States which is fine with me.' In his interview with NBC News, Trump also discussed the upcoming trip by special envoy Steve Witkoff and U.S. Ambassador to Israel Mike Huckabee, who will travel to the Gaza Strip on Friday. "We want to make sure people get fed," he said, referring to the hunger crisis in Gaza and saying he was looking forward to hearing their report on the situation. Asked if he trusts Israeli Prime Minister Benjamin Netanyahu to administer U.S. aid in Gaza, Trump said, 'He's certainly a competent person,' and added that he remained concerned about Hamas stealing aid. 'Good management will stop that," Trump said. "Hopefully the Israelis will provide that.'
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Miami Herald
8 hours ago
- Business
- Miami Herald
Free tax filing program could soon be axed by the IRS. Here's what to know
The Internal Revenue Service is poised to discontinue its Direct File program, which allows millions of Americans to file their taxes for free, drawing criticism from some Democrats. During a tax summit on July 28, IRS Commissioner Billy Long said the cost-free service is 'gone,' according to Bloomberg Tax. 'Big beautiful Billy wiped that out,' he added, referencing the sweeping congressional spending bill signed into law by President Donald Trump on July 4. The bill does not outright end Direct File, but it allocated $15 million to the Treasury Department to establish a task force to review the program and assess other options. An IRS spokesperson confirmed the agency is awaiting the task force's findings, which must be delivered to Congress within 90 days. 'We look forward to Treasury's forthcoming report to Congress on the Direct File program and on potential public-private partnership alternatives to Direct File, as required by the One Big Beautiful Bill,' the spokesperson said in a statement to McClatchy News. 'Long is committed to modernizing the IRS and providing a taxpayer experience that meets today's expectations, which includes giving taxpayers transparency into the status of their tax returns and audits,' the statement said. The Direct File program allows eligible taxpayers in certain states to electronically file their federal tax returns directly on the IRS website at no cost. The agency launched the pilot program in 2024, under then-President Joe Biden, making it available to taxpayers in 13 states. It was later expanded to include 25 states, including California, New York, Florida, Texas, Illinois, North Carolina and Pennsylvania. Residents of these 25 states reporting W-2 wage income, Social Security income, retirement income, and other credits and deductions are able to use the free service. But, taxpayers with business, rental or gig economy income are ineligible. The IRS website has a brief survey, allowing taxpayers to determine whether they are eligible. The Treasury Department said in October that more than 30 million Americans would be eligible to use the service during the 2025 tax season. Many Republicans have expressed criticism of the Direct File program, arguing it poses a number of problems. 'The program's creation and ongoing expansion pose a threat to taxpayers' freedom from government overreach,' a group of 29 House Republicans said in a December letter to Trump. They argued that the IRS faces a conflict of interest in preparing tax returns because it simultaneously acts as the tax collector and enforcer. The agency 'has little incentive to ensure hardworking Americans do not pay more than they owe in taxes and may instead benefit from families and small businesses paying greater amounts than they are required by law,' the letter said. Sen. Mike Crapo, an Idaho Republican, has also said it's unclear whether the program is legal without congressional approval. Democrats, on the other hand, have long defended the pilot program, contending it saves taxpayers time and money. In a January letter to Treasury Secretary Scott Bessent, then a nominee for the role, dozens of Democratic senators and representatives lauded the successes of Direct File. They said it had saved $5.6 million in tax preparation fees in its first year and was on track to save $11 billion per year 'at scale.' Since reports of the IRS' plan to axe the program emerged, several Democrats have expressed their disapproval. 'Direct File was an easy way for Americans to file their taxes for FREE each year,' Sen. Elizabeth Warren, a Massachusetts Democrat, wrote on X. 'It's a no-brainer — and it's popular. So why in the world did the Trump administration kill it?' she added. 'To give a huge handout to giant tax prep companies like TurboTax that rip Americans off.'
CBS News
12 hours ago
- Business
- CBS News
China uses "dark fleet" to buy oil from Iran and evade U.S. sanctions in international waters
A CBS News investigation has revealed that China is still secretly buying Iranian oil and evading U.S. sanctions by using what's known as a "dark fleet" to transfer oil from ship to ship in the middle of the sea. Over the years, the U.S. has implemented heavy sanctions on Iranian industries, including trying to stop tankers used to transfer Iranian oil to China, which could help fund Iranian nuclear development programs. On Wednesday, the Treasury Department imposed additional sanctions, which Washington called the most extensive action of its kind since 2018. Recently, a CBS News crew set off from Singapore, one of the busiest shipping ports in the world, to head more than 80 nautical miles away in international waters to see how the "dark fleet" operates. "As long as there's a supply, there will be a demand for this discounted oil," said Charlie Brown, a former U.S. Navy officer who's now a senior adviser with United Against Nuclear Iran, who is advising the U.S. government. The supply is Iran, the demand is China, and this mutually beneficial relationship, which has long angered the United States, plays out off the coast of Malaysia in the Riau archipelago, an area the size of New York City. "This is 'dark fleet' parking central," said Brown, who's been monitoring the "dark fleet" for years. He described one ship, the Tifani, as "a well-known 'dark fleet' tanker that's always been out here on a regular basis." The tankers, full of oil, sail from the Persian Gulf through the Strait of Malacca to the Riau archipelago. There, they transfer the crude to ships bound for China, which buys 90% of Iran's oil. During the CBS News crew's journey, four ship-to-ship transfers were happening in plain sight. These "dark fleet" tankers — all with their transponders switched off — clearly do not want to be identified. "Both ships have a net or something, a tarp, deployed over the stern, covering the name and identification number — it's obvious deceptive practice," Brown said. Further analysis revealed one ship was the elusive Stellar Oracle, laden with Iranian oil. It was placed on the U.S. sanctions list in May. Close by, another ship-to-ship transfer was underway involving the Alps — not its real name — filled with Iranian crude that was also sanctioned in May. The receiving vessel Eon, which is not on any list, was caught in the act — a new sanctions violator. According to a congressional report last year, this trade generated as much as $70 billion for Iran, propping up the regime and its nuclear weapons program. The Trump administration has imposed multiple rounds of sanctions on this trade this year, but it's having little effect. China doesn't recognize the unilateral U.S. sanctions on Iran and says that its trade with Iran is legitimate. By the end of the day, 12 ship-to-ship transfers were recorded in the Riau archipelago — an unprecedented number and a clear indication Iran and China are only ramping up this illicit activity.
Coin Geek
13 hours ago
- Business
- Coin Geek
White House report fails to add flesh to BTC reserve bones
Getting your Trinity Audio player ready... The White House's long-awaited digital asset report contains a vast smorgasbord of policy proposals, but it played its Strategic Bitcoin Reserve cards extremely close to its chest. On July 30, the White House released a 166-page report prepared by the President's Working Group on Digital Assets. The report followed a January executive order by President Trump to propose 'a Federal regulatory framework governing the issuance and operation of digital assets, including stablecoins.' The stablecoin issue has largely been resolved after Trump signed the GENIUS Act into law earlier this month. However, Trump also asked the Working Group to put some flesh on the bones of his order to establish both a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. And yet the report makes scant mention of either of these crypto treasuries, and there's no mention of them whatsoever in the accompanying fact sheet issued by the White House. The reserve/stockpile was to comprise, respectively, BTC and other tokens already in the government's possession following seizures/forfeitures. Additional BTC were to be added to the reserve if it could be done in a 'budget neutral' way. Based on pre-release comments by Working Group chair David Sacks and deputy Bo Hines, observers expected the report to include budget-neutral addition proposals. Nope. The report states that administration of the reserve/stockpile will be overseen by the Treasury Department and that the two vessels will 'be capitalized by forfeited digital assets.' However, as recent public debates have demonstrated, some of the assets currently in the government's possession belong to the victims of crime, so they're not the government's to keep. Also, while 'the bitcoin in the Reserve will generally not be sold,' some of the digital assets in the government's possession will be used 'to support law enforcement operations, to be equitably shared with state and local law enforcement partners, and to fulfill other statutory forfeiture program requirements.' As for the budget-neutral acquisition of more BTC, the report simply repeats previously issued language regarding the Treasury and Commerce departments being tasked with figuring out ways of stacking more sats without costing taxpayers a dime. But if Treasury/Commerce has any ideas on this score, they aren't talking about them. Hines spoke to Fox Business following the report's release, but wasn't pressed on the reserve/stockpile issue and didn't volunteer any specifics. Hines wasn't much more forthcoming in a conversation with the Crypto in America podcast, claiming that much work remained to 'build the infrastructure' of the reserve/stockpile. Other than that, Hines simply repeated previous statements to the effect that 'we do believe in accumulation, obviously in budget-neutral ways.' Asked directly 'how much Bitcoin does the government have,' Hines declined to even give a 'ballpark' figure. Hines cited 'several reasons' why the government wasn't disclosing this data, while allowing 'there might be a time that we do.' Other recommendations As for the lengthy report's other recommendations, a full table starts on page 141, but here are some broad strokes. The digital asset market structure bills currently before Congress aim to carve out clear lanes for the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). The report says the SEC and CFTC should 'use their existing authorities to immediately enable the trading of digital assets at the federal level,' but the CFTC should be given 'clear authority to regulate spot markets in non-security digital assets.' Many of the report's SEC recommendations—allowing unregistered token sales by projects not yet deemed 'mature'; an 'innovation exemption'; safe harbor for certain types of airdrops, etc.—mirror elements in the House of Representatives' market structure bill (CLARITY Act), which was approved earlier this month. The CFTC is urged to consider amending its rules 'to enable the use of blockchain-based derivatives' and to give guidance to prediction markets like Kalshi and Polymarket 'regarding the listing of leveraged, margined, or financed spot retail commodity transactions on digital assets.' The SEC and CFTC are both urged to consider 'more vertically integrated business models' by allowing registrants to 'offer multiple services within a single user interface.' For example, 'combining exchange services with custody of trading assets allows for real-time settlement.' While federal banking regulators have largely backed off the restrictive policies that so annoyed the crypto sector under the Biden administration, the report says regulators should 'never again' pursue policies that result in the alleged 'debanking' of crypto operators during Operation Choke Point 2.0. Instead, regulators are urged to 'embrace the opportunities digital assets and blockchain technologies offer to banks nationwide.' Similarly, federal banking regulators 'should provide clarity and transparency' regarding the process of obtaining a national bank charter and/or a Federal Reserve Bank master account. As for stablecoins, while the GENIUS Act is now law of the land, the report says 'all agencies to which Congress delegated responsibilities under the GENIUS Act should faithfully and expeditiously execute those responsibilities.' Agencies should also 'promote U.S. private sector leadership in the responsible development of cross-border payments and financial markets technologies.' Interestingly, the report notes that the benefits of stablecoin issuers holding a U.S. permit are 'modest,' suggesting claims of a supposed rush by foreign issuers to 'onshore' themselves may be overblown. As for central bank digital currencies (CBDCs), it should come as no surprise that the report suggests that they should be cast into the fiery pits of hell, and any country that issues a CBDC should be hit with 9,000,000% tariffs. In terms of combatting illicit finance, the Treasury Department's Financial Crimes Enforcement Network (FinCEN) is urged to evaluate how its digital asset guidance should be 'rescinded, modified or updated to reflect legislative and regulatory changes.' Congress is urged to 'consider creating a bespoke digital asset-specific financial institution types or sub-types, which could enable Treasury to more carefully tailor [anti-money laundering/countering the financing of terrorism] obligations to different participants in the digital asset industry.' Under a header reading 'Enabling Private Sector Investigations,' the report suggests Congress enact 'a digital asset-specific 'hold law' that offers a safe harbor to institutions that temporarily and voluntarily hold property involved in suspected illegal activity during a short duration investigation.' Examples of these institutions include exchanges and stablecoin issuers. And while it often appears that the Trump administration has no interest in pursuing crypto crooks, the report wants Congress to apply the Bank Secrecy Act's weight against 'foreign-located actors' should they engage in conduct that negatively impacts the U.S. Finally, on taxation, Congress is urged to create 'a new class of assets subject to modified versions of tax rules applicable to securities or commodities.' Taxpayers could also be required to report 'foreign digital asset accounts' to eliminate taxpayers' ability to 'conceal assets and taxable income by using offshore digital asset exchanges and wallet providers.' Congress is also urged to include digital assets in the rules regarding wash sales. Sen. Cynthia Lummis (R-WY) recently introduced a bill that would do just that, seeking to close the loophole that allows crypto traders to deduct income losses from wash trading tokens. Back to the top ↑ Coin mixers in the legal crosshairs The report wants Congress to 'codify principles regarding how control over an asset impacts Bank Secrecy Act (BSA) obligations, particularly for money transmitters. A software provider that does not maintain total independent control over value should not be considered as engaged in money transmission for purposes of the BSA.' This language addresses decentralized finance (DeFi) platforms, including coin mixing services like Tornado Cash. Speaking of, the trial of Tornado Cash co-founder Roman Storm is now in the hands of a jury, after both the prosecution and defense made their closing arguments on July 30 following two weeks of testimony. In August 2023, the Department of Justice (DOJ) charged Storm with conspiracy to commit money laundering, operating an illegal money transmitting business, and facilitating sanctions violations, leaving him facing up to 45 years in prison if convicted on all counts. Storm chose not to take the stand in his own defense, although he made a public appeal for another $1.5 million in donations to help cover his legal fees as the trial headed into its final week. Storm's defense centered mainly on the hands-off nature of Tornado Cash's developers, something the White House now appears intent on addressing. A similar defense was being prepared in the case of Keonne Rodriguez and William Lonergan Hill, co-founders of rival mixer Samourai Wallet, until they reached a last-minute deal with federal prosecutors this week. In April 2024, Rodriguez and Hill were arrested and charged with conspiracy to commit money laundering and conspiracy to operate an unlicensed money-transmitting business. Facing up to 25 years in prison, Rodriguez and Hill agreed this week to plead guilty to the money transmitting charge, in exchange for which the money laundering charge will be dropped. U.S. District Judge Denise Cote accepted the pleas. The defendants will be sentenced on November 7, and the pair has reportedly agreed not to appeal any prison sentence under five years. The pair has also agreed to forfeit $237 million (although only $6.4 million is to be paid pre-sentencing) and pay a fine of $400,000. Unlike Storm, who tended to play down Tornado Cash's role in laundering the proceeds of crime, the Samourai bros openly celebrated their roles, even publicly taunting European Union (EU) law enforcement agency Europol and promoting their service's ability to help Russian oligarchs evade economic sanctions. On Wednesday, Hill told Judge Cote that he 'understood that the proceeds of hacks of various sites could be sent through the code base of Samourai Wallet to obscure their origin.' Back to the top ↑ Coinbase, a16z, not making friends on Capitol Hill The Hill's coverage of the report featured a quote from a White House official that 'the [crypto] industry will be extremely pleased with us.' That apparently isn't always the case, as a new Wired report claims the industry fought the White House over how it wanted Congress to proceed in passing digital asset legislation… and the White House won. In June, the House and Senate were at loggerheads over how to proceed with the crypto bills in their respective chambers. House leadership wanted to combine stablecoin and market structure bills into a single piece of legislation, while the Senate wanted to get a stablecoin bill onto Trump's desk ASAP and do market structure later. Trump supported the latter strategy. Wired's sources claim the Coinbase (NASDAQ: COIN) digital asset exchange and the Andreessen Horowitz (a16z) (NASDAQ: ZADIHX) venture capital group had pressed Republicans to combine the House's market structure bill (CLARITY) with the Senate's stablecoin bill (GENIUS). Coinbase and a16z are among the largest contributors to the Fairshake political action committee that spent $135 million in the 2024 election cycle. Fairshake recently let it be known that it has amassed a $140 million war chest to spend ahead of the 2026 midterm elections and that it was watching closely how pols voted on the crypto bills. Apparently convinced that they now ran the government when it came to crypto matters, a 'senior administration official' told Wired that the two companies 'were being hissy pissy about the way to do things' and 'we said 'you're just fuckin' wrong.'' Coinbase was singled out by a different Republican operative as making enemies within the House GOP caucus by trying to 'throw [their] weight around.' This source claimed, 'at the end of the day [Coinbase] wasted two weeks of the legislative calendar by slowing everything down.' Coinbase's efforts to make nice with crypto-friendly Democrats in addition to Republicans also didn't sit well within GOP circles. The senior official added that crypto operators 'need to understand that if they stick with us they have a good chance of success—rowing against us will almost guarantee failure […] if [Democrats] take power again, you're not getting shit.' Back to the top ↑ Did Winklevii stab CFTC nominee Quintenz in the back? Speaking of crypto operators behaving badly, Politico reported Wednesday that Cameron and Tyler Winklevoss, co-founders of the Gemini exchange, were behind the White House's as-yet-unexplained decision to ask the Senate Agriculture Committee to cancel a confirmation hearing for Brian Quintenz, Trump's nominee for CFTC chairman. Given that this was the second cancellation in as many weeks, speculation had it that Quintenz's seat on the board of the CFTC-registered Kalshi might have raised some conflict of interest concerns. But Politico reported that the Winklevii had other reasons for calling Trump over the weekend to advise against keeping Quintenz as the nominee. Despite both Cameron and Tyler praising Trump's nomination of Quintenz when it was announced in February, the brothers reportedly told Trump that Quintenz was the wrong choice because he wouldn't 'shake up the CFTC enough.' A second source claimed the Winklevii told Trump that Quintenz was 'not aligned with Trump's agenda.' To support this assertion, the brothers reportedly pointed to Quintenz's testimony at an Ag Committee hearing in June in which he said he supported increasing the CFTC's budget (which is heresy in the DOGE cost-cutting era). Quintenz's budget comments reflect the fact that the CFTC is now expected to handle the bulk of digital asset oversight, despite its annual budget being less than one-fifth of the SEC's. The fact that the Winklevii found this to be a dealbreaker suggests the brothers might have other concerns they chose not to tell Trump about. A White House spokesperson told Politico that Quintenz 'remains President Trump's nominee' and the administration was looking forward to his 'swift confirmation.' Neither the Winklevii nor Quintenz have yet to address the report. Back to the top ↑ Kraken raising cash The Kraken digital asset exchange is second only to Coinbase among U.S. exchanges in trading volume, but Kraken has yet to follow Coinbase's lead by going public. That could change early next year, but there's apparently never a bad time to raise additional cash while pimping your surging revenue. On July 29, The Information reported that Kraken was looking to raise $500 million at a valuation of $15 billion. That valuation is a significant increase on the $10 billion sticker price the exchange gave itself in 2021 (and 2018's $4 billion valuation). Separately, Kraken co-CEO Arjun Sethi told Bloomberg that the exchange generated $412 million in 'gross revenue' in the three months ending June 30, an 18% improvement from the same period last year. Adjusted earnings (what Charlie Munger used to call 'bullshit earnings') totaled $79.7 million, down 7% year-on-year and less than half of Q1's $187.4 million. Kraken blamed the earnings decline on rising expenses from new product launches—like the new Krak app and tokenized equities outside America—and geographical expansion in markets including the EU and Brazil. Sethi said Kraken's Q2 trading volume hit nearly $187 billion, nearly one-fifth better than the same period last year. The number of funded accounts jumped 37% to 4.4 million, while total assets on the platform surged 46.4% to $43.2 billion (partly due to significant gains in the fiat value of digital assets, something beyond Kraken's control). Sethi took a dig at Kraken's rivals by saying the figures showed Kraken was 'gaining share across the board.' But when asked for updates on the timing of Kraken's IPO, Sethi demurred, saying only that 'when we think it's the right time for us to go, we'll go.' Back to the top ↑ Watch: Teranode is the digital backbone of Bitcoin title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Forbes
18 hours ago
- Business
- Forbes
Reflecting On IRS Cuts - Should You Still Be Compliant?
The IRS used to be a lot more formidable. I am certain of this from the experience of my career as an accountant which, is going on 50 years. depending on what parts you want to count. But you might say that the memories of old people are notoriously unreliable. That when they talk about either how great or how difficult it was in the past they tend to exaggerate. Not for nothing was I a history major. I understand that problem, so I will back up my claim with some history. The Olden Days I have a hard time accepting that 1985 is 40 years ago, but when you do the math, that is how it comes out. In 1985, I was approaching an inflection point in my career. I was promoted to manager some time around then, which really was not that big a deal at Joseph B. Cohan and Associates (JBC). I spent a good amount of time studying "Tax Reform For Fairness, Simplicity, And Economic Growth - The Treasury Department Report to the President" that was issued in 1984 and formed the basis for the Tax Reform Act of 1986, which is what made my career. During that period there were always a few audits of our clients going on. And it was not because they were picking on us. Here are some numbers from "Highlights of 1985 - Commissioner and Chief Counsel Internal Revenue Service". At the end of 1985, the IRS had 96,705 employees. Of them, 24,433 were involved in "Examination" and 15,119 in "Collection". They collected $743 billion from a population of 239 million at a cost of $0.48 per $100 collected. Of 96,496,900 1984 individual returns, 1,265,592 were examined. That's 1.31%. The rate for individual returns with total positive income over $50,000 was 3.53%. At the end of 2022, there were 84,553 IRS employees who collected $4.901 trillion at a cost of $0.29 per $100 collected from a population of 334 million. There were 161,666,477 individual returns of which 326,611 were examined. That is 0.2%. Returns from $500,000 to $1,000.000 were audited at a rate of 0.6%. Only for returns over $10,000.000 is the rate higher than the 1984 big dollar ($50,000) rate of 3.53%. This information is drawn from IRS Data Books. For some today's dollars perspective the $50,000 big bucks in 1984 would be $158,723 now. Interestingly President Trump has proposed no income tax for people making less than $150,000. At any rate the thresholds don't line up that well, but I want to keep going. So let's compare the 0.2%/0.6% 2022 rates to the 1.31%/3.53 1984 rates. The latter would be somewhat reflective of my experience in 1985. Using some elementary probability computations, we can determine that if the audit rate is at 0.6% (2022 big bucks, but not megabucks) in a forty-year career the chance that you will never face an audit is 79%. If you sign 100 tax returns as a preparer the chance that none of them will be audited is 54%. At the 0.2% rate your chance of no audits on 100 returns is 82% and the chance that you will never face an audit in a 40-year career is 92%. The 1984 audit rates are a different story. At the big bucks rate of 3.53% your chance of never being audited in the course of a 40 year career would be 24%. The chance that none of a pile of 100 returns that you signed as prepare would be audited would be 3%. I believe that created a much stronger sense that audits were a real thing that might happen to you. Certainly that was the sense at JBC. Current Events Recent history is that there was a ramp up in IRS personnel. The IRS closed fiscal 2024 with 99,628 employees. Then there are the current events. The reductions in IRS numbers are an ongoing story, but in May they were down to 77,000 and expected to continue going down. Numbers had been going down and got to 74,000 in 2018 and 2019 before starting back up. It looks like they may be heading lower. Not material in numbers, but somewhat symbolic, 250 IRS agents have been detailed to immigration enforcement. This is reminiscent of Ted Cruz's idea of abolishing the IRS and sending them all to the border. Regardless, it seems quite likely that audit coverage will not be going higher for 2025 and 2026 returns. What Should You Do? Treasury Circular 230 regulates people who practice before the IRS prohibiting written advice considering that a tax return might not be audited or that the particular matter would not be caught on an audit. American Institute of Certified Public Accounting (AICPA) standards of tax practice forbid practitioners from making recommendations that exploit the audit selection process of a taxing authority. The National Association of Enrolled Agents incorporates Circular 230 into its ethical guide. So a lot of the people who are competent in advising you on the tax law are supposed to ignore the high improbability of audit in giving you advice. I tried interviewing a couple to see if I could shake them loose. That will be the subject of my next post, but since I don't practice anymore and quit the AICPA because I thought the dues were not a good value, I can give you some advice if you want to exploit the low audit probability in the coming years, besides the advice to not do it because it is wrong. The first piece of advice is to remember that most likely this too shall pass. So avoid doing anything that will either extend or never start the statute of limitations. That would include not filing at all or large omissions of gross income and outright fraud. Whatever scheme you come up with and you really should come up with your own, don't tell anybody about it. Don't pay somebody a lot of money for tax schemes that the boring stick in the mud professionals tell you don't work. When the IRS comes up for air those may be the first things that they go after. You will be on a list that the promoter kept and the money you paid the promoter will be gone along with all the interest and penalties. If you owe the IRS a lot of money for past taxes, more than you can realistically pay, there is probably no point in being proactive in reaching out to them. When you do get notices pay close attention and when told that you have a right to a collection due process hearing send in the appropriate form. Provide the request information within the deadline. When they don't get back to you for long periods that is a good thing. There is a ten year statute of limitations on collections that runs against the IRS. The people who regularly call you about special programs to work out your IRS debt are almost certainly running scams. If you can't handle whatever monthly payment the CDP hearing results in, appeal. Conclusion I recommend that you stay compliant because it is the right thing to do, but there are some practical considerations. The chance of criminal prosecution for willful violation of the tax laws still exists, even if it is vanishingly rare for people who are not breaking other laws, and not bragging about it, or telling other people to do it. It does seem that in the current environment we may have administrations where enthusiasm for enforcing immigration laws alternates with enthusiasm for enforcing the tax laws. If I were engaging in tax shenanigan's my nightmare would be thousands of masked ICE agents being transferred to the IRS Criminal Investigation Division.
