Posts, Profits, & Penalties | Tax Law & Social Media | Part 1

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Devin M. Hludzik

Devin M. Hludzik

Attorney

469.998.8488
DHludzik@FreemanLaw.com

Ms. Hludzik represents clients in various stages of litigation, with a particular focus on federal tax controversies, as well as white-collar and financial disputes, both civil and criminal. She has experience on an array of issues, including IRS collections and federal investigations, and represents clients facing tax and white-collar or financial-related charges. Prior to joining private practice, Ms. Hludzik clerked for two judges at the United States Tax Court. 

Ms. Hludzik earned her B.S., cum laude, from the University of Central Florida. She earned her J.D., cum laude, from Charleston School of Law. After law school, she received her LL.M. in taxation from Georgetown University Law Center. Ms. Hludzik is licensed to practice in Texas and South Carolina.

A popular social media platform has been a hot topic for lawmakers, the media, and its users recently, and what a better way to kick off this series than to provide a summary and update of its status in the United States.

TikTok, owned by Chinese internet company ByteDance, is a social media platform that may or may not become permanently banned in the United States. Approximately 170 million Americans use TikTok, many of which utilize the application for financial support and were left in suspense when it went dark last weekend.

So, what happened?

All the way back during the COVID-era, on August 6, 2020, President Trump—citing national security concerns—issued an executive order prohibiting U.S. companies from engaging in any transaction with ByteDance and its subsidiaries (i.e., TikTok). A few days later, on August 14, 2020, President Trump issued a subsequent executive order requiring ByteDance to divest itself of TikTok’s U.S. operations. In March and April of 2024, respectively, both the House and Senate passed the bill requiring ByteDance to sell TikTok. On April 24, 2024, President Biden signed the bill, and ByteDance was required to comply by January 19, 2025.

TikTok and ByteDance, together, fought the legislation all the way to the U.S. Supreme Court, taking the position that any national security concerns were overstated and banning the application violates the First Amendment. Just two days shy of TikTok’s deadline, on January 17, 2025, the Supreme Court unanimously upheld the law, leaving ByteDance/TikTok roughly 48 hours to comply.

Late January 18, 2025, TikTok temporarily terminated its U.S. operations, and hundreds of millions of Americans were unable to access their TikTok profiles or scroll through videos. Also, TikTok was removed from application stores such as Apple and Google. The ban took effect on January 19, 2025; however, President Trump announced that upon his inauguration the next day, he would sign an executive order to delay the ban. TikTok—assumingly satisfied by President Trump’s announcement—slowly returned its features to U.S. users on January 19, 2025.

So, now what?

On January 20, 2025, President Trump issued an executive order instructing the Attorney General not to take any action to enforce the law banning TikTok for 75 days. What will happen between now and early April is unclear, and TikTok’s future in the U.S. remains uncertain.

This post is part of the Posts, Profits, and Penalties series, the introduction of which can be found here.

Freeman Law Attorneys

If you have any questions regarding potential social media-related tax issues, Freeman Law can help. We offer value-driven legal services and provide practical solutions to complex tax issues. Click here to schedule a consultation or call our office at (214) 984-3000.