Key Takeaways
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IRS Chief dumped.
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Treasury Secretary to fill in.
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Immigration and gaffes may have played role in ouster.
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Tariff revenue at legal risk.
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National Align Your Teeth Day.
Programming Note: It's a big week for Eide Bailly Webinars.
Today at 2:00 p.m. Central, it's New Tax Legislation: Maximizing Tax Benefits through Fixed Assets and Capital Expenditures.
Tomorrow at 1:00 p.m. Central, it's Eide Bailly's Annual State and Local Tax Update.
No charge, each webinar good for an hour of CPE credit. Register at the links.
Trump Is Removing I.R.S. Chief 2 Months After He Was Confirmed - Andrew Duehren, Alan Rappeport and Maggie Haberman, New York Times:
Mr. Long, who had little background in tax policy beyond promoting a fraud-riddled tax credit, had clashed at times with Treasury Secretary Scott Bessent during his brief tenure, three people familiar with the decision said. He also made high-profile mistakes, at one point last month telling tax practitioners that the agency’s all-important filing season would start late next year, a statement that the I.R.S. later said was premature.
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Mr. Long wrote on social media that he would be nominated to become the next U.S. ambassador to Iceland. “It is a honor to serve my friend President Trump and I am excited to take on my new role as the ambassador to Iceland,” Mr. Long wrote. “I am thrilled to answer his call to service and deeply committed to advancing his bold agenda. Exciting times ahead.”
Trump Removes Billy Long as Head of IRS - Brian Schwartz, Wall Street Journal:
He was the sixth IRS commissioner this year—after several interim heads—and he was set to remain in office until November 2027, filling the remainder of the term of Danny Werfel, who was appointed by then-President Joe Biden and resigned on Trump’s Inauguration Day. Long’s departure was earlier reported by the New York Times.
Why?
Donald Trump fires IRS chief after less than two months in the job - James Politi, Financial Times:
A Treasury spokesperson said in a statement: “His zeal and enthusiasm to bring a fresh perspective to the Federal Government was evident in both the House of Representatives and as part of the Trump Administration. A new candidate for Commissioner will be announced at the appropriate time.”
IRS, White House clashed over immigrants’ data before tax chief was ousted - Jacob Bogage and Kadia Goba, Washington Post:
The Department of Homeland Security sent the IRS a list Thursday of 40,000 names of people DHS officials thought were in the country illegally and asked the IRS to use confidential taxpayer data to verify their addresses, said the people, who spoke on the condition of anonymity for fear of reprisals.
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On Friday, though, the IRS responded that it was able to verify fewer than 3 percent of the names immigration enforcement officials submitted, the people said.
The article says the IRS refused to say whether any of the taxpayers identified by the IRS claimed the earned income tax credit based on privacy rules concerns. The article also has this:
That would be some real 3-D chess, going through a six-month confirmation process for the IRS Commissioner job as part of a secret plan to make Billy Long the Ambassador to Iceland.
IRS Chief’s Gaffes, Sudden Exit Roil the Fractured Tax Agency - Erin Slowey and Erin Schilling, Bloomberg ($):
“I talked with one of our top guys in the IRS last week while I was down in the Atlanta visit and I said, ‘What’s our start date?’” Long said during the National Association of Enrolled Agents Tax Summit on July 28 . “He said ‘The Presidents Day, historically is our start day.’”
Shortly after the announcement of his departure, Long posted on social media that tax filing season would start on time, around Martin Luther King Jr. Day.
He also announced that the Biden-era free filing tool, Direct File was gone. Bessent previously said Direct File would be offered until the end of filing season, which with extensions is Oct. 15.
Billy Long out as IRS commissioner after just 2 months on the job - Joe Walsh and Aaron Navarro, CBS News:
"It's Almost FriYay," the email's subject line read, according to the staffers.
What next for IRS
Long Out as IRS Commissioner, Bessent to Fill In - Alexander Rifaat and Benjamin Valdez, Tax Notes ($):
“It is unprecedented that a Treasury Secretary, and a member of the Cabinet, would serve as acting commissioner,” Nina Olson of the Center for Taxpayer Rights told Tax Notes. “It will erode trust in the tax agency as a non-political tax administrator.”
Bessent’s appointment as acting commissioner at the IRS marks the first time an individual has concurrently held those two roles, noted Olson, a former national taxpayer advocate and a member of Tax Analysts’ board of directors. Tax Analysts also funds a joint transparency project with the Center for Taxpayer Rights.
Last Tax Man Standing? Bessent Takes on IRS Job Few Seem to Want - Erin Schilling and Erin Slowey, Bloomberg ($):
He’ll be juggling oversight of the IRS as it implements Trump’s marquee tax legislation and prepares for next tax season while he pushes Trump’s aggressive tariff agenda. The decision to make the secretary the head of IRS is unusual, tax professionals said, considering the full plate he already has.
Political fallout
Billy Long out as IRS commissioner - Nicole Markus and Brian Faler, Politico:
“This is what Trump does — pick incompetent, unserious people for serious jobs, and sit back as the damage piles up.”
In his own words
From the IRS to Iceland - Josh Youngblood, Josh & Taxes:
So, I reached out to him directly via X (Twitter). To my surprise, when I woke up this morning, there was a message from him, offering a small glimpse into the human side of a position most of us only see through policy debates and political headlines.
Tariffs Today
How Trump’s $150 billion tariff brag could backfire - Ari Hawkins, Politico:
Several companies and states have challenged Trump’s use of an emergency law to impose some of his duties on individual countries, in a legal dispute that is likely to work its way up to the Supreme Court. As part of the case, companies have demanded the federal government pay them back for the tariff fees they’ve already paid out.
Trump’s own Justice Department has acknowledged in legal briefs filed with a U.S. Court of Appeals in recent months that if the tariffs are ruled unlawful, importers would be entitled to refunds, which Customs and Border Protection would likely process through standard administrative procedures.
Federal Circuit Judges Question Trump's Discovery of Vast Tariff Powers - Jacob Sullum, Reason:
That story received a skeptical reception last week at the U.S. Court of Appeals for the Federal Circuit, and it is not hard to see why. The legal pretext for President Donald Trump's stiff, wide-ranging, ever-changing import taxes defies credulity as well as the separation of powers.
What’s the status of tariff litigation, and where may things go from here? - Bryce Engelland, Thomson Reuters:
Meanwhile, in Learning Resources, the DC District court went even further, holding that the IEEPA doesn’t authorize tariffs at all. The statute, which has historically been used to freeze assets or block specific transactions, contains no mention of tariffs and was never intended as a tool for reshaping global trade.
These rulings are now stayed pending appeal.
Blogs & Bits
No changes this year to withholding tables or tax forms affected by OBBB - Kay Bell, Don't Mess With Taxes. "No withholding adjustments this year: The IRS announced on Aug. 7 that, as part of its phased implementation of the OBBB provisions, it won’t be making any immediate revisions to certain information returns or withholding tables in connection with tax changes that are effective for tax year 2025."
Capitol Hill Recap: Upping the Ante on Credits - Alex Parker, Eide Bailly. "Sen. Chuck Grassley last week escalated his confrontation with the Trump administration over implementation of the One Big Beautiful Bill Act--specifically, on the rollback of wind and solar energy credits."
The Truth About "Under the Table" Income - Matt Gaylor, Matt's Tax Firm Insights. "Just because you didn’t get a W-2 or 1099 doesn’t mean you’re in the clear. If you earned it, it’s still taxable. That applies whether you were walking dogs, doing work as a handyman, or getting paid in cash for freelance work."
D.C. Circuit: IRS Division's Decision Not to Pursue Whistleblower Case Is Not Appealable - Parker Tax Pro Library. "The D.C. Circuit held that when the IRS Whistleblower Office (WBO) sends a whistleblower's Form 211, Application for Award for Original Information, to an IRS operating division for further examination, the operating division's decision not to take action against any taxpayer based on the whistleblower's information is not reviewable by the Tax Court."
As IRS Withers Tax Pros Still Urge Compliance - Peter Reilly, Forbes. "What is troubling is that with close to no enforcement, the things that don't work mostly will work until the pendulum swings and enforcement ramps up. And then there may be wailing and gnashing of teeth."
What day is it?
Today is National Align Your Teeth Day. Notably, not "Align Your Teeth By Yourself Day".
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