The Gazette offers audio versions of articles using Instaread. Some words may be mispronounced.

There was a time when the only thing an Iowa business had to fear was weathering a bad crop season, losing a key client, or keeping up with rising input costs. Now, we have to worry about federal agents with audit powers and vague legal standing hamstringing our businesses.

That’s not speculative: it’s the reality creeping in under a policy called Revenue Ruling 2024-14. While D.C. spins it as a technical tax clarification, out here in the real world, it looks more like another excuse for bureaucrats to plant themselves in our ledgers and second-guess every legal transaction we make.

This ruling was issued by IRS Chief Counsel on June 17, 2024, as part of a broader effort to scrutinize partnerships and pass-through entities. While two related regulatory proposals—Notice 2024-54 and the “Transactions of Interest” regulations—were revoked in April 2025 for being overly burdensome and inconsistent with President Trump’s Executive Order on lawful governance, Revenue Ruling 2024-14 remains in full force. This is despite the fact that it addresses the exact same fact patterns as the withdrawn rules. For Iowa businesses, that inconsistency has real consequences.

At the heart of the issue is a standard accounting practice known as basis-shifting. For decades, partnerships have relied on basis adjustments to track how assets and value move through a business. These are not loopholes—they are codified, legal components of tax compliance used by farms, family businesses, manufacturers, and real estate developers across the state. These transactions are essential to managing capital and planning for growth.

But now, under Revenue Ruling 2024-14, IRS exam teams are empowered to disregard these transactions based on the “economic substance doctrine”— a legal theory so vague it allows agents to override the tax code if they believe a transaction lacked the right “intent.” That kind of open-ended enforcement creates uncertainty and invites abuse.

The IRS has also deployed a specialized “pass-through audit unit,” established in 2023, that has rapidly expanded its oversight of partnerships. These agents aren’t simply reviewing compliance—they’re aggressively pursuing cases under a framework that directly contradicts the administration’s stated goals of regulatory clarity and business-friendly governance.

This is not a theoretical risk. Nearly every business in Iowa is directly or indirectly affected. According to SBA data, 99% of businesses in our state are small businesses, and pass-through entities form the backbone of our economy. Half of Iowa’s private-sector workforce is employed by these businesses. If we can’t rely on predictable tax enforcement, we can’t responsibly invest, hire, or grow.

The solution is clear: the Treasury Department must revoke Revenue Ruling 2024-14 immediately. Until that happens, the IRS should freeze all enforcement activity from the pass-through audit unit. Congress must reassert its oversight authority and reign in unelected bureaucrats.

This isn’t about opposing taxation—it’s about insisting on fairness, clarity, and respect for the rule of law.

Sen. Chuck Grassley and our entire Congressional delegation should make clear that Iowa won’t stand by while bureaucrats undermine the very businesses that drive our state’s economy.

We’ve weathered a lot in this state. But unchecked bureaucracy shouldn’t be another barrier.

Chris Janda is the owner and founder of Inspire finance group. He lives in Des Moines.