IRS Targets Wealthy Tax Cheats to Recover $50 Billion

IRS Targets Wealthy Tax Cheats to Recover $50 Billion

The U.S. Treasury Department has announced that the Internal Revenue Service (IRS) will target a significant tax loophole, "partnership basis shifting," which allows wealthy taxpayers to move assets among related parties to avoid taxes. This initiative, supported by funding from the 2022 Inflation Reduction Act, aims to generate over $50 billion in revenue over the next decade. The decision follows a review concluding that these transactions lack economic basis.

Additionally, the IRS plans to increase audit rates for companies with assets above $250 million from 8.8% in 2019 to 22.6% by 2026. Audit rates on large complex partnerships with assets exceeding $10 million are also set to rise tenfold. This effort is part of a broader strategy to boost tax revenue and enhance taxpayer services.

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