Trump’s Plan To Eliminate The IRS Gains Momentum As Foreign Companies Face New Tax Burden

President Donald Trump is pushing forward with his effort to dismantle the Internal Revenue Service (IRS), shifting tax collection away from American citizens and onto foreign corporations. Commerce Secretary Howard Lutnick outlined the plan in a Fox News interview, revealing that Trump wants to replace the IRS with an External Revenue Service focused on collecting tariffs and trade duties.

The initiative targets industries that have long avoided paying US taxes. Lutnick pointed to the cruise industry, where most ships are registered in foreign countries like Panama and Liberia, allowing them to bypass tax obligations. Similarly, foreign alcohol imports enter the US market without paying the same duties as American-made products. Under Trump’s plan, these loopholes would be closed, ensuring foreign businesses pay their share.

Trump has already signed executive orders imposing tariffs on Canada, Mexico, and China. His administration argues that the US has long relied on taxing its own citizens while allowing foreign entities to benefit from American economic strength without contributing revenue. New fees on international trade would shift the burden away from individuals and onto businesses profiting from US markets.

Elon Musk’s Department of Government Efficiency (DOGE) has begun a full review of the IRS, signaling the administration’s intent to restructure or dismantle the agency. A DOGE staffer was reportedly sent to IRS headquarters to assess the agency’s operations, requesting detailed reports on business units, risks, and financial planning.

Republicans in Congress have largely supported Trump’s proposal, while critics argue the transition could be challenging. However, with Trump’s push to balance the federal budget and lower individual tax rates, his administration remains committed to finding alternative revenue sources.

The IRS has long been unpopular, particularly among conservatives. A Pew Research poll found that 50% of Americans view the agency unfavorably, a sentiment that grew after the Biden administration attempted to expand the IRS workforce by 87,000 employees.

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