Internal Revenue Service Commissioner Danny Werfel testifies before the House Appropriations Committee on Capitol Hill on May 7, 2024.
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.
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 are at a crossroads
This country and this world are at a monumental crossroads. US voters have an opportunity to beat back the forces of fascism and confront the billionaires who are rigging the economy, our media system, and our democracy, making it increasingly impossible for ordinary people to get by. We’re not just talking about the election. We’re talking about what must be done once these fascist elements are vanquished from power. We need a bolder set of solutions than what either major party has so far been willing to offer and a working-class movement ready to fight like hell for it. Trump didn't emerge from nowhere. The conditions that fueled MAGA authoritarianism were created by decades of radical neoliberal economic policies and a corrupt political system dominated by corporate interests. They slashed taxes on the super-rich, promising that the benefits would trickle down. They said giveaways to the corporate titans would make life more affordable for the rest of us. It was all bullshit. And when a bitter, betrayed populace searches for someone to blame, right-wing demagogues have little trouble finding scapegoats. People know when they're being lied to, but you won't hear any of this from the corporate media. Only independent journalism—powered and funded by people who believe in building a better world—can deliver truly trustworthy daily news. Our Fall Campaign is underway, and we need your help. To power our newsroom through the rest of the year, we need to raise $125,000 by midnight on October 31. So if you share our vision, please contribute whatever you can to sustain our work. |
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.