IRS Plans Leadership Change as Supreme Court Reviews Tax Ruling

IRS Commissioner Daniel Werfel resigned on January 20, 2025, amidst a shift in administration priorities, with Deputy Commissioner Douglas O’Donnell stepping in as acting commissioner. President Donald Trump has proposed creating an 'External Revenue Service' to manage tariff collections and other taxes on imports, aiming for a structured increase in tariffs rather than immediate heavy impositions. Discussions within Trump's economic team suggest a gradual tariff approach, potentially increasing by 2-5% monthly. Additionally, the U.S. Supreme Court will review a significant case concerning the IRS's authority to collect taxpayer debts, which could redefine IRS powers. This set of developments signals a potentially transformative period for tax policy and administration under the new leadership. The updates reflect ongoing changes and challenges within the U.S. tax system and its administration.