Trump Fires IRS Commissioner, Bessent Named as Acting Replacement
President Trump has fired IRS Commissioner Billy Long less than two months after his confirmation, continuing a string of rapid leadership changes at the agency. Treasury Secretary Scott Bessent will serve as acting commissioner, becoming the seventh person to lead the IRS in 2025. Reports suggest Long’s dismissal was tied to his refusal to share tax data with the Department of Homeland Security, despite a recent data-sharing agreement between the two agencies that is facing legal challenges.
Long’s confirmation process was marked by clashes with lawmakers, over whether he would comply with statutory protections on taxpayer information under IRC §6103. With no clear replacement named, speculation is growing that Trump may choose to dismantle the IRS altogether in favor of an “External Revenue Service” funded through tariff collections.
IRS Announces No Change to Information Returns or Withholding Tables
The 2025 Act (previously referred to as the One Big Beautiful Bill, or OBBBA) introduced tax deductions for both tips and overtime pay, fulfilling Trump’s campaign pledge of no taxes on tips or overtime. These deductions apply retroactively, starting from January 1, 2025. On Thursday, August 7, 2025, the IRS announced that for the 2025 tax year, there will be no changes to certain information returns or federal withholding tables in response to the new law. Forms such as the W-2, current Form 1099, Form 941, and other payroll-related documents will remain unchanged for 2025. Additionally, federal income tax withholding tables will not be updated this year.
According to the notice, the IRS aims to prevent disruptions during tax season and give itself, employers, and tax professionals sufficient time to adapt before revising certain forms. Employers and payroll providers should begin tracking eligible tips and overtime pay under the 2025 Act right away and establish systems for retroactive tracking. Taxpayers can expect updated forms and further guidance for the 2026 tax year.
Trump Announces Potential 100% Tariff on Foreign-Made Semiconductors, Nvidia and AMD Come to Deal on Sales with China
President Trump announced a proposed 100% tariff on all imported semiconductors on August 6, aiming to boost U.S. chip manufacturing and reduce reliance on foreign supply chains. Companies committed to building chip facilities in the U.S.—even if production hasn’t started—would be exempt. The move builds on the 2022 CHIPS Act, which offers incentives for domestic chip production.
Unveiled alongside Apple CEO Tim Cook, who pledged a $100 billion investment in U.S. manufacturing, the tariff could significantly impact global semiconductor supply chains and raise production costs. While intended to spur domestic industry, businesses may face near-term challenges, including higher prices and sourcing disruptions.
On August 11th, Nvidia and AMD have agreed to share 15% of their revenues from chip sales to China with the U.S, government, as part of a deal to secure export licenses for the semiconductors. Initially, the Trump Administration had halted the sale of chips to China earlier in April of this year due to national security concerns.
IRS Proposes Update to Line of Business Rules for Employee Benefits
The IRS has released proposed regulations (REG-132805-17) that would modernize how an employer’s “line of business” is determined for the purpose of excluding certain employee benefits from gross income under IRC Section 132(a). Specifically, these changes affect the exclusion rules for no-additional-cost services and qualified employee discounts, which are only excludable if offered in the ordinary course of the same line of business in which the employee performs substantial services.
Currently, line of business determinations are based on the outdated Enterprise Standard Industrial Classification (ESIC) Manual, last updated in 1974. The proposed regulations would replace the ESIC with the more modern North American Industry Classification System (NAICS), which is reviewed and updated every five years (most recently in 2022).
These changes would take effect for tax years beginning on or after the final regulations are published in the Federal Register. Employers offering excludable employee benefits should review their current classifications and prepare for potential re-evaluations of benefit eligibility under the updated NAICS framework.
U.S. Imposes New Tariffs on Indian Imports Amid Russia-India Oil Trade Concerns
On August 6, 2025, President Trump signed an Executive Order imposing an additional 25% tariff on certain Indian imports, raising the total duty to 50%. This measure, effective August 27, is a response to India’s indirect importation of Russian oil and aligns with ongoing U.S. sanctions related to Russia’s actions in Ukraine under Executive Order 14066. Exceptions apply for goods already in transit or entered before September 17, 2025.
U.S. businesses importing from India must quickly reassess supply chains, pricing, and vendor contracts to adapt to the increased costs. Consulting with trade experts and legal advisors is advised to ensure compliance and reduce potential financial and operational disruptions.
