US Treasury, IRS to close $50 billion tax loophole on partnerships
WASHINGTON -The U.S. Treasury and Internal Revenue Service said on Monday they will close a tax loophole exploited by large, complex partnerships, an action that they estimated could raise $50 billion in new revenue over 10 years.
New guidance on the subject coincides with the IRS' stepped-up enforcement campaign to increase audits of large, complex partnerships, backed by some $60 billion in funding over 10 years for the agency approved by Congress in 2022. "The proposed regulations, once finalized, would effectively eliminate the inappropriate tax benefits created from these abusive transactions between related parties," the Treasury said in a statement.
The Treasury said tax filings from"passthrough" business partnerships increased by 70%, to 297,400 in 2019 from 174,100 in 2010. But the audit rate for these partnerships fell to 0.1% in 2019 from 3.8% in 2010, due in large part to budget cuts over the decade.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
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