11:33 a.m., Weds, November 9, 2016
Trump wins, now what happens at the IRS?
I’ve already been on the phone with a plethora of clients and lawyers and other tax pros this morning, and everybody wants to know: what’s going to happen to the IRS under Trump?
Here are 6 things one guy that deals with the Service everyday thinks:
1. The IRS isn’t getting abolished. Sorry. The baby will always be hungry, regardless of who is in the White House. Government may shrink but it ain’t going away. The Federal government has to have blood to live. That blood is tax dollars, and somebody has to collect it - through whatever method or tax plan it is delivered. Abolish the IRS is a great battle cry until one seriously in line for President considers an unpaid Secret Service agent flanking you.
2. Follow the money to the Service. The bigger deal to watch may be the Republican sweep of Congress. Congress has the power to fund the agency or cut it back. If it doesn’t get sufficiently funded, expect less “service” from The Service. Is that even possible? Yes, it is! Remember the shutdowns a few years ago?
3. Don’t Forget Obamacare. Remember, unless/until Congress repeals Obamacare, the IRS still administers that system under the law. There will be confusion in this arena until this gets sorted out.
4. Koskinen, you're fired! Trump has already promised to replace the IRS Commissioner, John Koskinen. Who with? Well, HIMSELF, of course! This is rhetoric, but getting rid of Koskinen isn’t. He’ll be gone under Trump, one way or another.
5. More tax debts settlements will quietly happen, as the IRS tries to close the “tax gap” (the difference between tax dollars reported vs. tax dollars collected). The IRS’ tax debt settlement program, the Offer-in-Compromise was overhauled in 2012 to let more debts get settled. To make the coffers ring, if you will. I don’t expect major changes here. The IRS threw up some road blocks (raising the processing fee significantly) to make it tougher to get. I think that’s the only change taxpayers will see for awhile, though.
6. The Trump audit is unaffected. Trump seems to be faring just fine in his personal audits “every year” without wielding executive power. The salient details of the audit will never see the light of day. And, that’s as it should be.
Meanwhile, the markets are already autocorrecting and my small business owner clients are pretty jacked. What do you think?