The department moves to address the “basis shifting” of business partnerships to lower tax brackets.
The Treasury Department proposed new rules this week to hold high-profile tax evasion tactics to account, specifically targeting a business accounting practice known as “basis shifting.”
Some businesses attach themselves to other businesses to take on the legal designation of a partnership, a categorization that has become a well-known tax haven in the last decade. By becoming a partnership, legal entities belonging to a single owner can transfer assets between partnered businesses, allowing them to disseminate their profits enough to move into lower tax brackets.
By closing this loophole with this proposed rule, the Treasury Department estimates that $50 billion in properly-accounted taxes could be collected within the next ten years.
“Treasury and the IRS are focused on addressing high-end tax abuse from all angles, and the proposed rules released today will increase tax fairness and reduce the deficit,” Treasury Secretary Janet Yellen stated.
As the Lord Leads, Pray with Us…
- For Secretary Yellen to seek God’s direction as she heads the Department of the Treasury.
- For Treasury and IRS officials as they propose closing the partnership loopholes that allow corporations to attain a lower tax bracket.
Sources: The Hill, Washington Post
