Tax News & Views Fishes Roundup

Partnership Transfer Guidance

Treasury and IRS Crack Down on Related-Party Basis Shifting - Kristen A. Parillo, Tax Notes($):

A guidance package released by Treasury and the IRS aims to end abusive basis-shifting transactions by related-party partnerships, with the government predicting the effort will raise more than $50 billion in revenue over 10 years.

According to a June 17 IRS fact sheet, the basis-shifting transactions targeted in the new guidance generally fall into three groups.

Treasury Says Partnership Crackdown Could Raise Over $50B - David van den Berg, Law360($). "A regulatory project to stop large, complex partnerships from using murky business structures to boost deductions and dodge taxes, an effort launched Monday by the U.S. Department of the Treasury and the IRS, could ultimately raise over $50 billion in a decade, Treasury said."

IRS, Treasury going after abusive basis transactions - Kay Bell, Don't Mess With Taxes. "The country’s financial division and its tax collection arm agency say they are going after “a major tax loophole exploited by large, complex partnerships.”

ERC in the News

IRS Asks Court To Leave Alone Worker Retention Credit Pause - Anna Scott Farrell, Law360($):

An Arizona federal court should reject a tax advisory firm's request to lift the IRS' moratorium on processing claims for the pandemic-era employee retention credit, the agency argued, saying the agency should be allowed to continue to run the program as it sees fit.

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The firm, which helps businesses apply for the credit and relies on getting a portion of the proceeds in fees, sued the IRS in May, claiming the agency's moratorium caused the firm irreparable harm and violated the Administrative Procedure Act by failing to go through the required public comment period. The firm has lost millions of dollars because of the IRS' approach to the credit, it said.

Energy Credit Guidance

'Energy Communities' Update May Clarify Tax Credit Eligibility - By Anne Loomis, Adam Kobos and Mitchell Emmert, Law360($):

On June 7, the U.S. Department of the Treasury Department and the Internal Revenue Service issued Notice 2024-48, which includes lists of information that taxpayers may use to determine whether they meet certain requirements for energy communities under the statistical area category or the coal closure category.

On June 7, the IRS also updated its FAQs for energy communities.

Biden administration announces tax breaks to push higher pay for green energy workers - Zack Budryk, The Hill. "The Treasury Department on Tuesday announced final rules for prevailing wage and registered apprenticeships (PWA) under the Inflation Reduction Act (IRA), saying that qualifying employers in the renewable energy sector will be eligible for a fivefold increase in the available tax credit."

Other Tax News & Views

Tax Court Upholds Liability on Retirement Savings Scheme - Caitlin Mullaney, Tax Notes($):

A retired attorney is liable for over $8.4 million in unpaid taxes stemming from an employee stock ownership plan scheme that he created, the Tax Court held.

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“He attempted to evade tax on that income by hiding it in a maze of attenuated financing arrangements, misleading documents, wire transfers among multiple bank accounts and financial institutions, and stock transactions lacking economic substance,” Gale wrote.

What day is it?

It is an interesting combination today: International Sushi Day, National Fishing Day, and Clean Your Aquarium Day.

Tax News & Views Fishes Roundup

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Jenny McGarry