IRS and Treasury Launch Initiative to Close $50 Billion Tax Loophole

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have launched an initiative aimed at closing major tax loopholes they say are used by wealthy taxpayers and corporations, including hedge funds, law firms, and real estate and investment partnerships to avoid paying full taxes. On Monday, the two agencies announced a regulatory effort “that will stop large, complex partnerships from using opaque business structures to inflate tax deductions and avoid taxes.” The agencies highlighted the issue of “partnership basis shifting transactions,” a technique that wealthy taxpayers use to make billions in taxable income “disappear.” In such transactions, a single business operates through multiple entities and manipulates tax rules to “maximize tax deductions and minimize tax liability.”...