The whirlwind of the second Trump administration has not left the IRS unscathed. Trump broke with precedent by promising to fire the tax-collecting agency’s commissioner, leading him to resign. Plans to add a further 10,000 employees are on hold following Trump’s executive order freezing federal hiring, which follows his statement about intending to fire or reassign 90,000 recently hired IRS staffers. The IRS has not yet, however, felt the force of those proposed changes. In fact, there are indications the upheaval at the IRS may be more limited than elsewhere. One reason is that Trump is hunting for revenue to pay to extend and expand the Tax Cuts and Jobs Act of 2017. Although the president hopes tariffs will cover those costs, he has also indicated a desire to close the “carried interest” loophole. Those efforts could be a sign that certain recent IRS audit and enforcement activities targeting fund managers and their personnel could survive the current deregulatory environment. Those trends were discussed by a panel at the Private Investment Fund Tax & Accounting Forum featuring Kostelanetz LLP partners Caroline D. Ciraolo and Melissa Wiley, as well as Eisner Advisory Group partner Miri Forster. This article summarizes the panel’s insights on which entities are receiving increased audit attention; the types of claims facing more IRS scrutiny; and how to effectively navigate the audit and enforcement process. See our two part series “Hot Topics in Tax and Negotiating Tips for Private Fund LPs”: Part One (Aug. 10, 2023); and Part Two (Aug. 24, 2023).