Daines Joins Push to Reverse Biden-Era IRS Initiative Targeting Small Businesses

U.S. Senator Steve Daines is calling on the U.S. Department of the Treasury to reverse a Biden-era Internal Revenue Service (IRS) initiative that he and several Republican colleagues argue unfairly targets Main Street businesses.

In a letter co-signed by Senators Marsha Blackburn (R-Tenn.), John Barrasso (R-Wyo.), and James Lankford (R-Okla.), Daines criticized the creation of a special IRS compliance unit focused on pass-through entities—business structures commonly used by small businesses and family-owned operations across the country.

“Pass-through entities form the bulk of Main Street businesses across the country,” the senators wrote. “This includes countless family businesses, professional services firms, and real estate ventures that serve as the backbone of our local economies.”

The lawmakers argue the unit, created at the direction of President Joe Biden, imposes disproportionate compliance burdens on small businesses, while raising questions about whether the IRS is prioritizing enforcement over fairness.

“Taxpayers have the lawful right to choose these structures for benefits like liability protection, operational flexibility, and simplified tax filing,” the letter continues. “The creation of an enforcement unit specifically focused on pass-through entities raises legitimate concerns about whether the focus is on improving compliance or simply targeting specific business structures based on institutional prejudice.”

Pass-through entities, such as S corporations, partnerships, and sole proprietorships, pass income directly to owners or shareholders, avoiding double taxation. They are widely used by entrepreneurs and small business owners across Montana and the U.S.

Senator Daines has frequently voiced concerns about what he calls federal overreach into the affairs of small businesses and rural economies, and has positioned himself as a strong advocate for tax policy that supports business growth and investment.

The letter urges Treasury officials to reassess the necessity and scope of the compliance unit, and to ensure any enforcement efforts do not unfairly target the business structures that underpin local economies.

By: DNU staff