Four Senate Republicans are seeking answers about a Biden-era Internal Revenue Service (IRS) compliance unit, citing concerns that the office was driven by “ideological considerations” and put disproportionate burdens on small businesses across the country.
Republican Sens. Marsha Blackburn of Tennessee, Steve Daines of Montana, James Lankford of Oklahoma and Senate Majority Whip John Barrasso wrote to Trump administration Deputy Treasury Secretary Michael Faulkender on Tuesday requesting an update on the IRS’ pass-through compliance unit, according to their letter exclusively obtained by the Daily Caller News Foundation. The four GOP senators, who sit on the Senate Finance Committee, called on the Department of Treasury to ensure businesses that operate as pass-through entities will not face increased audit rates and other aggressive enforcement measures.
“The creation of an enforcement unit specifically focused on pass-through entities raises legitimate concerns about whether the focus is on improving compliance or simply targeting specific business structures based on institutional prejudice,” the lawmakers wrote. “This type of targeting is problematic no matter the size of the business, but is especially challenging for smaller businesses who have fewer resources to navigate such audits.”
The IRS compliance unit was formed during the final months of former President Joe Biden’s term.
Biden IRS Commissioner Danny Werfel justified the creation of a special pass-through compliance unit to “ensure the IRS holds the nation’s wealthiest filers accountable to pay the full amount of what they owe.”
“We are honing-in on areas where we believe non-compliance among our wealthiest filers has proliferated over the last decade of IRS budget cuts, and pass-throughs are high on our list of concerns,” Werfel said in September 2023.
President Donald Trump and Congressional Republicans have sought major changes to the IRS since taking control of Washington.
The Trump administration is requesting a $2.5 billion cut in annual funding to the IRS as part of the president’s fiscal year 2026 budget request. The president’s Department of Government Efficiency (DOGE) has also subjected the agency to steep staff reductions.
House Republicans’ draft tax bill would eliminate the agency’s Biden-era direct file program, which allowed users to file tax returns directly to the agency at no cost through an online platform.
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