Trump Proposes Radical Overhaul of U.S. Tax System: IRS to Be Replaced with External Revenue Service

President Trump has unveiled a controversial proposal to dismantle the Internal Revenue Service (IRS) and establish an External Revenue Service, marking a potentially transformative shift in U.S. tax policy. The plan would replace traditional federal income tax collection with a system primarily funded by tariffs on imported goods.

The proposed changes could significantly impact taxpayers, particularly in Washington, D.C., where many federal employees and businesses closely track tax policy developments. Under the initiative, individual taxpayers would be relieved from federal income tax responsibilities, while the government would generate revenue through international trade tariffs.

The proposal introduces substantial uncertainty for individuals with existing tax liabilities and outstanding tax liens. Current enforcement strategies and legal frameworks governing tax obligations would undergo fundamental restructuring, creating potential challenges for taxpayers seeking to resolve outstanding tax issues.

Experts suggest the proposed transformation could have far-reaching implications for the national economic landscape. By shifting from income-based taxation to tariff-driven revenue generation, the government would fundamentally redesign its fiscal approach, potentially altering international trade dynamics and domestic economic structures.

Taxpayers are advised to closely monitor these developments and prepare for potential changes in tax collection mechanisms. The proposed shift represents a significant departure from existing tax infrastructure and could require substantial adaptive strategies for individuals and businesses.