SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
Internal Revenue Service Commissioner Danny Werfel testifies before the House Appropriations Committee on Capitol Hill on May 7, 2024.
(Photo: Kevin Dietsch/Getty Images)
IRS Expects $50 Billion Return by Closing Loophole Exploited by the Super Rich
"Thanks to President Biden and Democrats in Congress, a well-funded IRS is closing a loophole to make the rich pay their taxes," said Sen. Elizabeth Warren.
Jun 17, 2024
The Internal Revenue Service announced Monday that it is cracking down on a complex maneuver that corporations and rich individuals use to avoid taxes, the agency's latest enforcement action since receiving a badly needed infusion of funding from the Inflation Reduction Act.
The new IRS policy targets a tactic known as "basis shifting," whereby business partners move "the tax basis of their assets amongst each other to take abusive deductions or reduce gains when the asset is sold, effectively making taxable income disappear," the Treasury Department explained in a statement.
"This announcement signals the IRS is accelerating our work in the partnership arena, which has been overlooked for more than a decade and allowed tax abuse to go on for far too long," said Danny Werfel, the commissioner of the IRS. "We are building teams and adding expertise inside the agency so we can reverse long-term compliance declines that have allowed high-income taxpayers and corporations to hide behind complexity to avoid paying taxes. Billions are at stake here."
The Treasury Department estimates that the new IRS initiative could raise more than $50 billion in federal revenue over the next decade.
Sen. Elizabeth Warren (D-Mass.) applauded the IRS' step, writing on social media that the Biden administration is "right to end these shell games."
"The super-wealthy use complex tax schemes to avoid paying what they owe," Warren wrote. "Thanks to President [Joe] Biden and Democrats in Congress, a well-funded IRS is closing a loophole to make the rich pay their taxes."
IRS funding provided by the Inflation Reduction Act—a Democratic measure unanimously opposed by the congressional GOP—has allowed the agency to more aggressively pursue rich tax dodgers whose more complicated returns require greater resources to audit than those of working-class Americans, who were audited at a higher rate than millionaires under the Trump administration.
Republican lawmakers are currently trying to slash IRS funding and scrap a free online tax-filing system that the agency launched this year. As The Hill reported earlier this month, House Republicans have proposed cutting IRS funding for fiscal year 2025 by $2.2 billion, specifically targeting enforcement resources.
The IRS estimated earlier this year that if Republicans don't succeed in rolling back funding increases, the agency could collect roughly $560 billion from big corporations and rich tax cheats over the next 10 years.
"This is why you fund the IRS," said former U.S. Labor Secretary Robert Reich.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
The Internal Revenue Service announced Monday that it is cracking down on a complex maneuver that corporations and rich individuals use to avoid taxes, the agency's latest enforcement action since receiving a badly needed infusion of funding from the Inflation Reduction Act.
The new IRS policy targets a tactic known as "basis shifting," whereby business partners move "the tax basis of their assets amongst each other to take abusive deductions or reduce gains when the asset is sold, effectively making taxable income disappear," the Treasury Department explained in a statement.
"This announcement signals the IRS is accelerating our work in the partnership arena, which has been overlooked for more than a decade and allowed tax abuse to go on for far too long," said Danny Werfel, the commissioner of the IRS. "We are building teams and adding expertise inside the agency so we can reverse long-term compliance declines that have allowed high-income taxpayers and corporations to hide behind complexity to avoid paying taxes. Billions are at stake here."
The Treasury Department estimates that the new IRS initiative could raise more than $50 billion in federal revenue over the next decade.
Sen. Elizabeth Warren (D-Mass.) applauded the IRS' step, writing on social media that the Biden administration is "right to end these shell games."
"The super-wealthy use complex tax schemes to avoid paying what they owe," Warren wrote. "Thanks to President [Joe] Biden and Democrats in Congress, a well-funded IRS is closing a loophole to make the rich pay their taxes."
IRS funding provided by the Inflation Reduction Act—a Democratic measure unanimously opposed by the congressional GOP—has allowed the agency to more aggressively pursue rich tax dodgers whose more complicated returns require greater resources to audit than those of working-class Americans, who were audited at a higher rate than millionaires under the Trump administration.
Republican lawmakers are currently trying to slash IRS funding and scrap a free online tax-filing system that the agency launched this year. As The Hill reported earlier this month, House Republicans have proposed cutting IRS funding for fiscal year 2025 by $2.2 billion, specifically targeting enforcement resources.
The IRS estimated earlier this year that if Republicans don't succeed in rolling back funding increases, the agency could collect roughly $560 billion from big corporations and rich tax cheats over the next 10 years.
"This is why you fund the IRS," said former U.S. Labor Secretary Robert Reich.
The Internal Revenue Service announced Monday that it is cracking down on a complex maneuver that corporations and rich individuals use to avoid taxes, the agency's latest enforcement action since receiving a badly needed infusion of funding from the Inflation Reduction Act.
The new IRS policy targets a tactic known as "basis shifting," whereby business partners move "the tax basis of their assets amongst each other to take abusive deductions or reduce gains when the asset is sold, effectively making taxable income disappear," the Treasury Department explained in a statement.
"This announcement signals the IRS is accelerating our work in the partnership arena, which has been overlooked for more than a decade and allowed tax abuse to go on for far too long," said Danny Werfel, the commissioner of the IRS. "We are building teams and adding expertise inside the agency so we can reverse long-term compliance declines that have allowed high-income taxpayers and corporations to hide behind complexity to avoid paying taxes. Billions are at stake here."
The Treasury Department estimates that the new IRS initiative could raise more than $50 billion in federal revenue over the next decade.
Sen. Elizabeth Warren (D-Mass.) applauded the IRS' step, writing on social media that the Biden administration is "right to end these shell games."
"The super-wealthy use complex tax schemes to avoid paying what they owe," Warren wrote. "Thanks to President [Joe] Biden and Democrats in Congress, a well-funded IRS is closing a loophole to make the rich pay their taxes."
IRS funding provided by the Inflation Reduction Act—a Democratic measure unanimously opposed by the congressional GOP—has allowed the agency to more aggressively pursue rich tax dodgers whose more complicated returns require greater resources to audit than those of working-class Americans, who were audited at a higher rate than millionaires under the Trump administration.
Republican lawmakers are currently trying to slash IRS funding and scrap a free online tax-filing system that the agency launched this year. As The Hill reported earlier this month, House Republicans have proposed cutting IRS funding for fiscal year 2025 by $2.2 billion, specifically targeting enforcement resources.
The IRS estimated earlier this year that if Republicans don't succeed in rolling back funding increases, the agency could collect roughly $560 billion from big corporations and rich tax cheats over the next 10 years.
"This is why you fund the IRS," said former U.S. Labor Secretary Robert Reich.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.