A year after Elon Musk’s Department of Government Efficiency (DOGE) cut a swath of destruction through vital federal agencies including the Internal Revenue Service, Musk’s apparent antipathy toward the IRS suddenly makes more sense.
Documents released by Musk’s company SpaceX in advance of its record-breaking initial public offering show that SpaceX has claimed a whopping $1.9 billion in income tax breaks that the company believes would likely be disallowed on audit—which means Musk and the other owners of SpaceX have 1.9 billion reasons to want to see the IRS’s enforcement capabilities defunded. And new administrative data from the IRS suggest that Musk and other big corporations may yet be handsomely rewarded for this effort.
Privately-owned companies like SpaceX aren’t required to make public disclosures about their taxpaying behavior. So until this moment, it’s been impossible to know whether the company has paid any federal income taxes in the past. But when private companies plan to go public—as SpaceX now does—they must file a “form S-1” with the Securities and Exchange Commission. This is an initial registration document that gives much of the same information about a company’s tax profile that publicly traded companies must make available to shareholders and the public.
SpaceX’s S-1 form tells us that the company has claimed a total of $1.9 billion in “uncertain tax benefits” (UTBs). These are tax breaks that the company has claimed on its tax forms, but that it believes would more likely than not be rejected by a properly functioning IRS. These are also, importantly, tax breaks that the company believes it’s still in danger of losing if the IRS is allowed to do its job. (When the statute of limitations on tax avoidance runs out, such tax breaks are removed from a company’s UTB tally, a frequent and lucrative outcome for big corporations.)
And SpaceX appears to be manufacturing these probably illegal tax breaks faster than it’s producing booster rockets: In 2025 alone, the company claimed $282 million of income tax breaks that the company believes it shouldn’t legally be allowed to keep. This is actually a step down from the $302 million in doubtful tax breaks the company claimed the previous year.
This doesn’t mean that SpaceX’s tax team is on the wrong side of the law 24-7. The company’s new disclosure shows that SpaceX is well-versed in the art of claiming “perfectly legal” tax breaks as well. In 2025 alone the company raked in $2.9 billion of accelerated depreciation tax breaks, a figure that was surely turbocharged by the permanent bonus depreciation included in last year’s Trump tax cuts. SpaceX also claimed $600 million in R&D tax credits.
So even if DOGE’s evisceration of the IRS is someday reversed, the company will have a traditional array of Congressionally-sanctioned tax breaks to rely on and could easily achieve escape velocity from federal income tax laws in the same way that dozens of other large, profitable corporations routinely do under the Trump corporate tax regime.
And Elon Musk has already demonstrated that this isn’t his first tax-avoidance rodeo. A series of ITEP analyses have shown that Musk’s car company Tesla has been astonishingly successful at avoiding more than passing encounters with the federal income tax laws, and a recent Reuters investigation found that Tesla has concealed billions of dollars in foreign tax havens.
The main reason accounting rules require companies to disclose UTBs is so that shareholders (and tax administrators) can get a sense of how aggressively corporate leaders are claiming tax breaks that are, to put it politely, in the grey areas of the law. And SpaceX’s disclosure says quite clearly that the owners of SpaceX are feeling lucky. The $282 million in probably-illegal tax breaks claimed by SpaceX last year represent more than a third of the company’s $718 million income tax expense for 2025.
Will Musk’s effort to defund the IRS result in a multi-billion-dollar personal payoff? We’ll have to wait for future SpaceX financial disclosures to know that for sure. But there’s already emerging evidence that the post-DOGE IRS is less able to investigate corporate tax avoidance than it used to be. Newly released IRS data show that the agency’s audit-related collections from corporations in fiscal year 2025 fell by over $3 billion relative to the previous year.
All of which makes it far more understandable that Musk, in his time running DOGE, appeared ready to base his decisions about IRS budget cuts on a poll of his Twitter followers. SpaceX is openly telling tax administrators that if they look carefully at the company’s tax filings, they’ll find $1.9 billion in tax breaks it shouldn’t be allowed to claim—which means the less capacity the IRS has to enforce the laws going forward, the richer Musk and other owners of SpaceX will be.
During his brief reign at DOGE, Musk portrayed himself as a brave defender of American taxpayers against an overreaching and inefficient bureaucracy. But by focusing his ire on the one federal bureaucracy that’s capable of collecting the taxes his companies owe, Musk now appears less interested in saving Americans from unnecessary red tape than in feathering his own nest.
