Since the new Trump administration took office, I’ve been contemplating how its bold policy shifts will impact not just the tax and accounting industry but also everyday business owners.
A while back, I began drafting an article on the impending changes, with one of my key focuses being the effects of the first wave of layoffs… particularly on the IRS.
I’ve been fielding numerous questions from clients about how to navigate this shifting landscape. My advice remains consistent. Before making any drastic moves, let’s look at history and see what actually gets passed in Congress. Now is the perfect time to fine-tune your business, much like prepping your home before winter (or a massive storm), ensuring it’s resilient enough to weather the changes ahead.
A Shifting Landscape: How DOGE Layoffs Have Reshaped the System
For decades, the Internal Revenue Service (IRS) has been the backbone of tax collection in the United States. But recent developments… including widespread DOGE (Department of Government Efficiency) layoffs – have left many taxpayers wondering what the future holds. With a gutted IRS workforce and increasing reliance on automation, the number of audits may be significantly decreased, tax disputes will skyrocket, and uncertainty has become the norm.
Since the first round of DOGE-related reductions, IRS field agents and enforcement officers have dwindled. Routine audits of high-net-worth individuals and small businesses have become infrequent. Many taxpayers have celebrated these cutbacks, assuming fewer audits mean fewer headaches.
But there’s a catch – automated systems are taking over, and they don’t negotiate. The old days of working out a tax dispute with a revenue officer might be fading fast, replaced by algorithm-driven notices and penalties that are nearly impossible to appeal.
This leaves business owners in a tricky position: do you trust a dwindling IRS workforce to let mistakes slide, or do you prepare for an era where every number on your tax return is cross-checked by relentless AI?
Or… is this the time where having a sharp tax strategist in your corner more important than ever? Only time will tell. But one thing history has taught us – whenever major changes take place, new loopholes tend to emerge, and it often takes years before they’re closed. Let’s not forget, AI may be enforcing the rules, but it’s still “programmed” by humans who decide what it should look for and how to interpret the data.
Will DOGE Eliminate the IRS?
Despite what some may believe, the IRS isn’t disappearing anytime soon. Obviously, this is my humble opinion…. but let’s not forget the federal government’s reliance on tax revenue is far too great. However, the way taxes are enforced and collected is evolving rapidly. The IRS of today is already different from the one we knew a decade ago – and in four years, it may be unrecognizable.
One of DOGE’s primary objectives has been to increase government efficiency, which has led to deep investments in technology and AI-driven tax enforcement. Rather than eliminating the IRS, DOGE is pushing it into a new phase where automated compliance checks, AI-driven audits, and digital-only tax filings will become the standard.
For business owners, this means two things: fewer human interactions with IRS agents and a much higher likelihood that even small discrepancies in tax returns trigger automated penalties. The IRS may not knock on your door, but an algorithm could flag your return before you even realize there’s an issue.
What Tax Laws Are Likely to Change?
With automation leading the charge, tax laws will shift to accommodate digital enforcement. Expect more real-time reporting requirements for businesses, particularly those in e-commerce and service industries. The days of waiting until tax season to sort out deductions could be over, replaced by ongoing, AI-monitored compliance throughout the year.
Another likely change is the increased taxation of digital assets and alternative investments. The government has been struggling to keep up with the rise of cryptocurrency and decentralized finance. By 2028, it’s expected that stricter capital gains tax enforcement will target crypto transactions, making it harder to move digital assets without triggering a taxable event.
Additionally, the corporate tax rate is a wildcard. With DOGE’s push to streamline government spending, there’s speculation that small business tax incentives could be phased out in favor of a simplified, but possibly higher, flat tax system.
That means S-Corp and LLC owners who have enjoyed tax-saving strategies in the past may find themselves with fewer options if they don’t plan ahead.
Am I Going to Pay More in Taxes?
The short answer: It Depends (I know, complete legal mumbo-jumbo to avoid the question).
If your income is primarily W-2 wages, expect payroll taxes to increase incrementally as the government seeks new revenue sources. If you’re a business owner, deductions may tighten, but opportunities will still exist for those who understand the new tax landscape.
One major concern is how DOGE’s policies could impact tax brackets and deductions. If the government moves toward a flat or more automated tax structure, deductions that business owners have relied on – like home office expenses, vehicle write-offs, and meal deductions, could be reduced or eliminated.
The best way to stay ahead? Understand the changes before they happen and adapt accordingly. A tax strategy that worked in 2024 may not hold up in 2028, and waiting until the last minute to adjust could cost you thousands.
Should I Sell All My Assets?
In times of uncertainty, it’s natural to wonder whether you should liquidate assets before tax laws change. While this might seem like a logical move, it’s not always the best strategy.
Selling assets can trigger capital gains taxes, and if DOGE’s automation efforts intensify, those sales could be flagged for immediate taxation. Instead of panic selling, a more strategic approach is to reassess your portfolio and plan for tax efficiency.
For business owners, this means ensuring assets are held in the right structure – whether that’s a trust, a holding company, or a retirement account. For individuals with significant crypto holdings, now is the time to consider tax-advantaged strategies like charitable contributions, tax-loss harvesting, or shifting assets to long-term holdings where capital gains taxes are lower.
What Does This Mean for My Business?
The next four years will bring major changes to tax compliance. Businesses that adapt early will have a clear advantage. The biggest takeaways?
First, automation is increasing, meaning businesses must maintain impeccable records. If your bookkeeping has been sloppy in the past, now is the time to clean it up. AI-driven audits don’t care about good intentions… they only see numbers.
Second, the structure of your business matters more than ever. With potential shifts in small business tax incentives, it’s critical to ensure your entity type aligns with upcoming changes. For some, an S-Corp will still be the best option. For others, moving to a C-Corp or using a hybrid structure may provide better protection against tax increases.
Finally, tax strategy is no longer an end-of-year task. With real-time compliance checks and AI monitoring, proactive planning is the only way to stay ahead. The days of fixing mistakes after filing are over… getting it right from the start is now the only viable option.
Let’s NOT forget Who is In Charge
If you fell asleep during my ramble above… if there is anything you should pay attention to – IT’S THIS!
At the end of the day, tax policy is shaped by those in charge and if history is any guide… President Trump will craft an agenda, his agenda, that is pushed through Congress – whether we like it or not.
Make no mistake about it… it will be one that serves:
1. His legacy
2. His voters
3. His own interests (let’s be honest here, this one is most likely the highest priority… for him)
The last time President Trump presented a new round of tax cuts… it was a windfall for businesses and industries that backed him, and we’re already seeing hints of where this is headed. Eliminating taxes on low-income tip wages, nixing overtime tax, and playing hardball with tariffs.
But let’s not kid ourselves here – if there’s another wave of tax breaks, expect them to favor big real estate investors, corporate giants, and, of course, America’s favorite car brands (Tesla included, because even political interests take a backseat to profits). If you own a small business, invest in property, or drive something with an American flag decal on the bumper, buckle up – this ride might be in your favor.
Now Is the Time to Work With a Tax Strategist
If there was ever a perfect moment to reassess your tax strategy, it’s now. The IRS is changing, automation is taking over, and the old ways of managing taxes are quickly becoming obsolete. A proactive approach isn’t just recommended – it’s necessary.
Working with a tax strategist ensures that your business remains compliant, protected, and optimized for savings. As tax laws evolve, having expert guidance can mean the difference between thriving in this new landscape or paying significantly more than necessary.
The next four years are set to bring major changes – will your business be prepared? A free 45-minute consultation with me can give you the clarity you need.
What’s the worst thing that can happen? You walk away knowing your business is already in great shape. On the other hand… the best case? We help you save thousands of dollars. Either way, you’ll sleep better at night.
But WAIT… there is mor… well, actually there isn’t. Just book now!
Welcome to the New Age of Accounting. Let’s begin.
Chris is the Managing Partner at Weston Tax Associates, a best-selling author, and a renowned tax strategist. With over 20 years of expertise in tax and corporate finance, he simplifies complex tax concepts into actionable strategies that drive business growth. Originally from Sweden, he now lives in Florida with his wife and two sons.
