New rules from the United States Treasury aimed to sic the Internal Revenue Service on successful businesses “costing the federal government billions of dollars each year.”
Sure to delight socialists everywhere, a “major tax loophole” became the focus of the Treasury Monday that the department believes could amount to more than $50 billion in revenue taken in by the federal government over the next decade.
A statement announced that “partnership basis shifting,” a process in which assets are moved around to reduce tax liability, would be brought to an end.
Describing how “wealthy individuals, complex partnerships, and large corporations” had been using the tax code to their advantage, the department wrote, “a single business that operates through many different legal entities (‘related parties’) enters into a set of transactions that manipulate partnership tax rules to maximize tax deductions and minimize tax liability….For example, a partnership might shift tax basis from property that does not generate tax deductions (such as stock or land) to property that does (such as equipment).”
In a statement reported by the Associated Press, Deputy Treasury Secretary Wally Adeyemo summed up the practice as “really just a shell game.”
Likewise, as Treasury argued basis shifting was “costing the federal government billions of dollars each year,” IRS Commissioner Danny Werfel had said, “These tax shelters allow wealthy taxpayers to avoid paying what they owe.”
Partnership tax specialist Miles Johnson of the Tax Law Center at New York University Law added to the AP, “these transactions effectively make income disappear from the tax system by creating depreciation deductions or other tax reductions that don’t reflect any true economic cost.”
Treasury Secretary Janet Yellen credited President Joe Biden’s so-called Inflation Reduction Act with providing the resources necessary as her department lamented that audits of passthrough businesses with over $10 million in assets had fallen from 3.8 percent in 2010 to 0.1 percent in 2019 while filings from those same businesses increased from 174,100 to 297,400 over that same period.
“Thanks to resources from President Biden’s Inflation Reduction Act, Treasury and the IRS have the tools to stop longstanding abuses,” she said while arguing, “Treasury and the IRS are focused on addressing high-end tax abuse from all angles, and the proposed rules released today will increase tax fairness and reduce the deficit.”
As it happened, the IRA had allocated $80 billion in new funding to the IRS that Americans had been assured would not be used to audit the average taxpayer.
Johnson noted the rule and guidance showed that IRS sought to curb basis shifting “by eliminating their tax benefits and better identifying them to the IRS as without substance.”
Meanwhile, socialist fan girl and Massachusetts Sen. Elizabeth Warren (D) reacted on social media more at the heart of the effort and wrote, “The super wealthy use complex tax schemes to avoid paying what they owe. @TreasuryDepSec and @IRSnews are right to end these shell games. Thanks to President Biden and Democrats in Congress, a well-funded IRS is closing a loophole to make the rich pay their taxes,” earning snide derision.
LOL—the U.S. debt is over $34 trillion and is increasing by $1 trillion every 100 days.
Closing this so-called “loophole” will supposedly increase revenue by $50 billion over 10 years (i.e., only about 0.1% of the CURRENT national debt). However, by the end of that 10 years…
— The Digital Cowboy (@TXDigitalCowboy) June 18, 2024
That will then be sent to the Ukraine… in one month.
— BMC (@BMC42) June 17, 2024
I hate it when wealthy people use that money to invest in our capital markets. I’d much rather it spent ineffeicnly and given to foreign countries. ‘Murica!
— Draco Blaze (@DracoBlaze51) June 17, 2024
The government pissed that away in the time it took me to read the Tweet
— Awaiting my free stuff (@tesicram) June 17, 2024
Click this link for the original source of this article.
Author: Kevin Haggerty
This content is courtesy of, and owned and copyrighted by, https://americanwirenews.com and its author. This content is made available by use of the public RSS feed offered by the host site and is used for educational purposes only. If you are the author or represent the host site and would like this content removed now and in the future, please contact USSANews.com using the email address in the Contact page found in the website menu.