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The IRS Throws Down the Gauntlet to Certain Large Partnership Basis-Shifting Transactions by ROBERT S. HORWITZ and MICHEL R. STEIN

Consistent with its efforts to restore fairness in tax compliance by shifting more attention onto high-income earners, partnerships, and large corporations, on June 17, 2024, the IRS unveiled a series of documents taking aim at basis shifting transactions by related-party partnerships. These documents are:

  • IRS Fact Sheet FS 2024-21, which announces the new IRS program;
  • Revenue Ruling 2024-14, identifying transactions the IRS claims lack economic substance;
  • Notice 2024-54, previewing planned regulations; and
  • Proposed regulations that identify certain types of basis-shifting transactions as transactions of interest, which are a form of reportable transaction (REG-124593-23).

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