Treasury Secretary Scott Bessent said the Treasury Department and the IRS are reviewing a number of Wall Street tax products and strategies that may exploit the federal tax code. While emphasizing that the administration welcomes innovation in financial markets, Bessent said tax policy should reward productive investment—not abusive financial engineering—and warned investors to be wary of products that appear “too good to be true.” Treasury officials indicated they are examining strategies that may cross the line into abusive tax avoidance, signaling increased oversight of sophisticated tax-driven investment structures.
The comments build on a broader message from IRS leadership in recent months. IRS CEO Frank Bisignano has reiterated that legitimate tax incentives are intended to encourage real economic activity—not serve as vehicles for abusive tax shelters. In announcing renewed enforcement efforts against questionable conservation easement transactions, the IRS warned taxpayers that promoter-driven strategies promising inflated tax benefits can result in disallowed deductions, substantial penalties, and other consequences. Acting IRS Chief Counsel Kenneth Kies added that courts have repeatedly rejected abusive arrangements and urged taxpayers and advisors to carefully evaluate transactions that appear designed primarily to generate tax benefits rather than economic value.
The combined message from Treasury and the IRS is that tax planning remains acceptable when it follows both the letter and the intent of the law, but products marketed primarily to exploit perceived loopholes are likely to face increased regulatory scrutiny and potential enforcement action.
With the US deficit moving higher, tariff rebates going out and less tariffs coming in, the initiatives from DOGE a long forgotten memory (failure?). and the bills from the war getting more steep, looking at ways to get more revenues in may become more and more of a focus.
They should also claw back ill-gotten gains from the huge amount of insider trading that is taking place and maybe look at tax avoidance from crypto as well. I would expect Trump will look to get $$$ from foreign countries for the US defense.
This article was written by Greg Michalowski at investinglive.com.
