In the following Gorfine, Schiller & Gardyn podcast, Aaron Bloom, Director of Tax Services at GSG, provides a thorough analysis about the IRS’ efforts to 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.
The IRS plans to close a tax loophole known as “partnership basis shifting,” which allows wealthy taxpayers to move assets among related parties to avoid paying taxes. The U.S. Treasury Department estimates that ending this practice could generate over $50 billion in revenue over the next decade.
Due to previous underfunding, the IRS had reduced audits on high-income individuals, contributing to an increase in these tax avoidance strategies. The proposed rule aims to eliminate the tax benefits of such transactions and increase scrutiny on large pass-through businesses and complex partnerships.
Following are key highlights from this interview:
- How this effort could be the result of the proposed increase in funding for the IRS, and the current state of the IRS. (:55)
- About when “partnership basis adjustments” are legally allowed by the IRS, and what the IRS is looking for with regards to “partnership basis shifting.” (3:10)
- About the concept of “partnership basis shifting” and how it has been used to avoid paying taxes. (4:38)
- Overall, what taxpayers need to know about this change at the IRS. (7:39)
- How GSG can help. (8:45)
If you need more clarity around this change at the IRS, and how to best structure a transaction in ways that help ensure compliance with the IRS, please contact here.
Categories: Podcast, Tax, Tax Planning, Small Business
