IRS closes a tax loophole that could raise $50B over 10 years

West Virginia (CNN) – The Internal Revenue Service announces its closing of a major tax loophole that could raise 50 billion dollars over a decade. 

It’s an ongoing effort boosted by funding received through President Biden’s Inflation Reduction Act. 

The loophole is called “basis shifting transactions.” 

Basis-shifting transactions allow complex business partnerships to move money from one property to another to maximize tax deductions and minimize their tax liability. 

The IRS will now be on the lookout for these kinds of transactions, which have no substantial business purpose other than reaping a tax benefit. 

As the November election approaches, the Biden administration is eager to show how it’s using money from the 2022 legislation to increase tax revenue and modernize the IRS. 

Republicans are at odds with Democrats over the funding, criticizing it as wasteful spending and making several efforts to chip away at the agency’s budget. 

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