K-STREET, 10,000 FEET: Republicans slam IRS revenue rule: “Trump can fix this”
THE LOWDOWN:
The IRS Revenue Ruling 2024-14, which was announced by the Biden administration in June of 2024 is coming under fire from Republicans, who slammed it to the Washington Reporter.
The ruling expands use of the economic substance doctrine (ESD), which was originally codified by the Democratic-controlled Congress in 2010 with support from the Obama administration. The Biden administration’s IRS ruling weaponized the ESD by removing guardrails around its use, which has led to massive fines and compliance fees, costing the American economy billions.
Insiders tell the Reporter that the Revenue Ruling is high on the list of priority fixes for the new Trump team to ensure it no longer undermines President Donald Trump’s pro-growth agenda.
A person close to the Trump administration told the Reporter that “President Trump has an opportunity to fire Biden/Obama deep state officials, undermining his agenda, and end a rule that is crushing economic growth. This is a no brainer.”
The IRS Revenue Ruling 2024-14, which was announced by the Biden administration in June of 2024 is coming under fire from Republicans, who slammed it to the Washington Reporter.
The ruling expands use of the economic substance doctrine (ESD), which was originally codified by the Democratic-controlled Congress in 2010 with support from the Obama administration. The Biden administration’s IRS ruling weaponized the ESD by removing guardrails around its use, which has led to massive fines and compliance fees, costing the American economy billions.
Insiders tell the Reporter that the Revenue Ruling is high on the list of priority fixes for the new Trump team to ensure it no longer undermines President Donald Trump’s pro-growth agenda.
One former Senate GOP chief of staff told the Reporter that “there’s an urgency to revoke the Revenue Ruling now. This Biden SWAT team is dishing out absurd fines according to numerous companies I’ve spoken with. Many are afraid to speak publicly because they fear retaliation. Fines and litigation fees will cost billions. It’s undermining President Trump’s economic agenda because businesses won’t onshore only to be further punished by the IRS. The Revenue Ruling could be revoked today. This is a nightmare.”
The Reporter has also learned that the House Republicans have been privately engaging with the Trump administration to end this rule.
Adding more concern for Republicans is the fact that Holy Paz, a Biden holdover, is the commissioner of the division overseeing a special pass-through audit team created by Biden to target businesses and partnerships with this Revenue Ruling — and which has openly mocked President Trump and his supporters.
Paz was previously a key deputy to Lois Lerner, the former Obama official who targeted conservative nonprofits at the IRS. Further, Paz was accused of misleading Congress by Rep. Jim Jordan (R., Ohio) at the time. Republican leaders have spoken out about her and her role in pushing weaponized rulings beyond just the Revenue Ruling, with Sen. Tom Cotton (R., Ark.) calling her continued presence at the IRS, “Deeply Disturbing.”
A person close to the Trump administration told the Reporter that “President Trump has an opportunity to fire Biden/Obama deep state officials, undermining his agenda, and end a rule that is crushing economic growth. This is a no brainer.”
A senior House GOP Leadership aide told the Reporter that “this is textbook government weaponization. The U.S. Treasury must immediately revoke Revenue Rule 2024-14 to prevent this Biden IRS swat team from continuing to initiate outrageous fines against US businesses. These deep state IRS bureaucrats are undermining the President’s economic agenda. What incentive do companies have to onshore when this team is fining them so heavily?”
