How New IRS Rules and the Presidential Race Will Affect Wealth Management

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Wealth management experts play a key role in helping individuals and families navigate the financial landscape and plan for the future. However, as tax laws and regulations evolve, advisors must stay abreast of changes and the potential impact on their clients’ financial plans.

Over the past two months, top IRS officials have introduced new guidelines for distribution of emergency pension plans for victims of domestic violence final rules cryptocurrency transaction reportingprogress in millionaire tax collection program and more.

These changes are taking place in a dynamic political landscape that is being created President Joe Biden’s decision not to seek re-election and support Vice President Kamala Harris instead Democratic nomination.

This prompted experts to analyze the policy records of both Harris and former U.S. President Donald Trump to predict what the regulatory landscape might look like under each administration.

READ MORE: ‘Extremely unpredictable’ election casts doubt on tax policy outlook

From her time as state attorney general to California senator to the White House, Harris has supported numerous initiatives, largely focused on people earning less than $100,000 a year. Examples include LIFT (Livable Incomes for Families Today) Middle Class Act the bill she proposed in 2018, Rent Relief Acther “Medicare for All“plan and more.

On the Republican side, many associate Trump’s candidacy with a 922-page plan developed by the Heritage Foundation, known as Project 2025which proposes significant changes in the functioning of the Securities and Exchange Commission, personal income tax and more.

“The policy vision in Project 2025 is extremely advanced and specific in terms of capital markets policy,” Michael Canning, founder of public policy consultancy LXR Group, told Financial Planning in an email. Tobias Salinger“The bill proposes a major overhaul of securities laws and an overhaul of the SEC in the name of reducing complexity and promoting capital formation. Capital formation would become a primary policy goal.”

Financial Planning Study more than 190 advisors at brokerages, registered investment advisors (RIAs) and other firms to assess industry outlooks for the coming year. The economy, primarily inflation, was the biggest concern for 63% of respondents, with rising political and socioeconomic instability and regulatory scrutiny/enforcement rounding out the top three.

The data further suggested that customers would likely postpone major purchases, cut investments and put retirement plans on hold.

The IRS isn’t the only entity that’s been busy over the past few months. The U.S. Supreme Court has issued five significant rulings that have made changes, starting in late Chevron Respect to this as SEC investigates securities fraud cases —all of which introduce far-reaching changes to the powers of regulatory agencies.

READ MORE: The Supreme Court’s Term Was Eventful — Here’s What Its Decisions Mean for Financial Advisers

Below are the most significant initiatives the IRS has undertaken in recent weeks and their impact on the wealth management industry.