Congratulations to all tax practitioners on successfully navigating another challenging spring season—your dedication and expertise continue to be the backbone of our tax system. Enjoy the post-tax season breathing room!
This week, we highlight significant IRS leadership changes as Acting Commissioner Gary Shapley was quickly replaced by Deputy Treasury Secretary Michael Faulkender amid reported tensions between Treasury Secretary Bessent and Elon Musk. We also cover the NFIB’s request for destruction of BOI records filed before the domestic entity requirement was dropped, we have an analysis of multi-state filing complexities across jurisdictions, an update on the Treasury’s announcement to remove basis-shifting transaction-of-interest regulations, and news surrounding the IRS’s DRP 2.0 program with approximately 20,000 employees requesting the buyout offer before the April 14 deadline.
Did you miss last week’s edition? You can find it here.
Acting IRS Commissioner Replaced by Treasury Official
By Mike Cohn for Accounting Today
Gary Shapley, who was named acting commissioner of the Internal Revenue Service only days ago, was removed by President Trump and replaced by Deputy Treasury Secretary Michael Faulkender amid a power struggle between Treasury Secretary Scott Bessent and Elon Musk. The New York Times reported that Bessent was outraged that Shapley was named to head the IRS without his knowledge or approval and complained to Trump about it. Shapley was installed as acting commissioner on Tuesday, only to be ousted on Friday, when Bessent named Faulkender as the new acting commissioner.
Business advocacy group seeks destruction of millions of BOI records
By Martha Waggoner for The Tax Adviser
A small business advocacy organization that sued over beneficial ownership information (BOI) reporting requirements asked the federal government to destroy BOI reports filed before the government dropped the requirement for domestic entities. In a letter dated April 9 and addressed to Treasury Secretary Scott Bessent, the National Federation of Independent Business (NFIB) said the U.S. Financial Crimes Enforcement Network (FinCEN) “should not use or disseminate, and should destroy, BOI that FinCEN already collected from millions of domestic reporting entities” before the government said in March that reports were required only for foreign companies doing business in the United States.
Nonresident Income Tax Filing Laws by State, 2025
By Katherine E. Loughead for Tax Foundation
Tax Day is here, and if you’ve already filed your federal and state income tax returns, you’re probably relieved to check that off your to-do list until next year. For most Americans, income tax filing is a time-consuming, resource-intensive, and tedious process. According to the Internal Revenue Service (IRS), this tax season, nonbusiness individual income taxpayers will spend an average of 8 hours and $160 filing their federal tax returns, while owners of pass-through businesses will spend an average of 24 hours and $620 to file. When state (and sometimes even local) filing is required, the costs of compliance can increase significantly. And for taxpayers who are required to file resident and nonresident tax returns in multiple states (and even multiple localities), the complexity can be enough to intimidate even paid tax preparers.
Basis-Shifting Transaction of Interest Regulations to be Removed
By Kevin Brewer for Journal of Accountancy
Treasury and the IRS, in Notice 2025-23, announced the intent to remove basis-shifting transaction-of-interest (TOI) regulations. The notice, published Thursday, also provides immediate relief from penalties under Secs. 6707A(a), 6707(a), and 6708 for any failure by participants or material advisers to file disclosure statements or maintain lists required by the regulations. The notice stated that it withdraws proposed regulations to address partnership-related-party basis-shifting transactions that it had announced in Notice 2024-54.
IRS DRP 2.0 Contract Language: Would You Sign It?
By Jason Bramwell for CPA Practice Advisor
Many IRS employees, who didn’t take the first deferred resignation offer earlier this year, jumped at the chance to take the buyout this time around, while others have decided to ride it out, hoping they will be spared from the reduction in force plans at the tax agency. Roughly 20,000 IRS employees requested to take the deferred resignation offer before the deadline concluded on April 14, but many are still waiting for the contracts to be released so they can sign the offer. Under the terms of DRP 2.0, employees who take the deal will be put on paid administrative leave through Sept. 30 and then leave their federal jobs. IRS workers eligible for DRP 2.0 could start paid administrative leave as early as April 28, and “generally no later” than June 2, said an email sent to Treasury Department employees earlier this month
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