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$50 Billion Tax Crackdown: Treasury and IRS Unveil Plan to Close Loophole, Targeting $160 Billion Annual Tax Gap!

Closing Loopholes: Treasury Targets “Related Party Basis Shifting

Combatting Tax Inequality: New Regulations Aim to Generate $50 Billion in Revenue

According to MSN, the US Treasury and IRS are taking decisive action to close a significant tax loophole that has been exploited by the ultra-wealthy to generate an additional $50 billion in tax revenue over the next ten years. This crackdown specifically targets what the Treasury labels as “related party basis shifting transactions.” These maneuvers involve sophisticated business structures that artificially inflate deductions. By leveraging opaque entities within a single company these practices enable corporations to shift tax liabilities from assets that do not qualify for deductions to those that do.

This initiative comes at a time of heightened concern over a substantial tax gap amounting to $160 billion annually among the top 1% of earners. The issue has been exacerbated by a notable rise in filings from pass-through businesses which saw a 70% increase from 2010 to 2019 coupled with a dramatic decline in IRS audits during the same period dropping from 3.8% to a mere 0.1%. Treasury Secretary Janet Yellen emphasizes that these new regulations are part of a broader strategy to combat high-end tax abuses supported by resources allocated through President Biden’s Inflation Reduction Act. The measures include tightening reporting requirements for basis-shifting transactions and issuing rulings to challenge transactions lacking economic substance.

READ ALSO: 22-Year-Old Convicted Of Murder For Fatal Garage Shooting In Decatur, Georgia: Sincere Rush Faces Sentencing In July!

$50 Billion Tax Crackdown: Treasury and IRS Unveil Plan to Close Loophole, Targeting $160 Billion Annual Tax Gap! (PHOTO: CPA Practice Advisor)

Strengthening Tax Integrity: Treasury and IRS Propose Rules to Close Wealth Disparity Loopholes

After a thorough year of research the Treasury and IRS have proposed multiple rules aimed at improving transparency and accountability in tax filings. The initiative reflects a proactive approach in tackling complex tax avoidance strategies used by the wealthiest individuals and corporations. By enhancing the integrity of the tax system the agencies seek to address long-standing criticisms of loopholes that undermine fairness and contribute to income inequality. As part of the regulatory process the agencies are soliciting public feedback to refine and finalize the rules marking a significant stride towards closing loopholes that have historically benefited the ultra-wealthy at the expense of broader tax fairness.

READ ALSO: Quarterly Income Tax Penalties Surge In 2023: Key Strategies To Avoid IRS Fees

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