The IRS plans to end a major tax loophole for wealthy taxpayers that could raise more than $50 billion in revenue over the next decade, the U.S. Treasury Department says.
The guidance and ruling being announced Monday includes plans to essentially stop “partnership basis shifting” — a process by which a business or person can move assets among a series of related parties to avoid paying taxes.
Biden administration officials said after evaluating the practice that there are no economic grounds for these transactions, with Deputy Treasury Secretary Wally Adeyemo calling it “really just a shell game.” The officials said the additional IRS funding provided through the 2022 Inflation Reduction Act had enabled increased oversight and greater awareness of the practice.
“These tax shelters allow wealthy taxpayers to avoid paying what they owe,” IRS commissioner Danny Werfel said.
The IRS processed 162 million tax returns in FY 2023. If they raise $50 billion, then that means $308 for every taxpayer in America, courtesy of the IRS.
Honest taxpayers rejoice. Tax cheats, go cry about it.
Really it has no impact on most of us. I have never used a partnership tax basis shift and almost certainly never would have. It is going to cost a bunch of obscenely wealthy jerks some money and cost the rest of us nothing. Win-win.
No NEGATIVE impact, you mean.
Taking money that would otherwise just be passed back and forth between billionaires and hectomillionaires hurts nobody.
Investing that money in any of the thousands of critically underfunded parts of the government (education, infrastructure including Internet, antipoverty programs, and public defenders being some of the most important ones) could be absolutely TRANSFORMATIVE, especially for those most in need and/or most abused by the current status quo.
i’m a big fan of “hectomillionaires” (the term, not the system that allows hectomillionaires to exist to the detriment of us all, of course)
What about decamillionaires and kilomillionaries? Gotta love metric system.
Kilomillionaire literally means 1000 millions, aka a billion (short system) or a milliard (long system).
Correct. Now let’s wait for american scared of metric.
—James Grime, mathematician, Numberphile
That $50 billion is over a 10 year period.
$30.80 a year is still $30.80, and that is literally money that requires no extra work or payment on the part of the honest taxpayer.
There is 0% chance this change would actually result in $50 billion more in tax revenue, lol.
This is political theater in an election year.
Every other year is an election year or right before an election year. The IRS is not a political body. Its commissioner is a civil servant.
All I’m saying is look up and familiarize yourself with “dead cat strategy”, and don’t hold your breath for this to yield anything substantial if put into practice.