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Elizabeth Warren (D-MA)
Elizabeth Warren
Democrat·Massachusetts

Warren, Wyden, Lawmakers Slam Proposed Trump Rule Enabling Tax Dodging by Partnerships, Tilting Tax Code Toward Richest Americans

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Home Newsroom Press Releases April 22, 2026 Warren, Wyden, Lawmakers Slam Proposed Trump Rule Enabling Tax Dodging by Partnerships, Tilting Tax Code Toward Richest Americans “This proposed rule will remove a simple reporting requirement, which will neutralize one of the few remaining tools available to the IRS to spot abusive partnership transactions.” Text of Letter (PDF) Washington, D.C. — U.S. Senator Elizabeth Warren (D-Mass.), a member of the Senate Finance Committee, and Senator Ron Wyden (D-Ore.), Ranking Member of the Senate Finance Committee, led their colleagues in a letter to Treasury Secretary Scott Bessent and Assistant Secretary for Tax Policy Kenneth Kies, strongly opposing a new proposed rule that removes a Biden-era reporting requirement for related-party partnership transactions. The rule, entitled “Removal of Final Regulations Identifying Certain Partnership Related-Party Basis Adjustment Transactions as Transactions of Interest,” would enable tax dodging by some of the wealthiest Americans by neutralizing one of the few remaining tools available to the IRS to spot abusive partnership transactions. “Removing this reporting requirement will enable tax dodging by some of the wealthiest Americans, further tilting our tax code in favor of the rich and powerful,” wrote the senators. Long-standing IRS rules allow (and in certain cases require) partners or partnerships to adjust the tax basis of property as a result of certain partnership transactions. But businesses and high net worth individuals with complex partnership structures — and the resources to hire armies of accountants and lawyers to game the system — have applied basis shifting rules to avoid billions of dollars in taxes without real costs or changes in economic position. The Biden administration, recognizing that the IRS was not catching these schemes due to the extreme complexity of partnerships’ tax returns, announced a rule requiring partnerships to report certain basis-shifting transactions to the IRS and focused resources on increased audits of complex partnerships — efforts which were estimated to raise approximately $100 billion over a decade. But now, the Trump administration is proposing to repeal the Biden-era rule, in addition to firing and pushing out IRS employees newly hired to examine partnerships. Already, partnership audits have decreased drastically under the Trump administration since 2024. “We oppose the Trump Administration’s efforts to enable tax avoidance by the wealthy and urge the Treasury Department to maintain the basis shifting reporting regulations and reinstate robust enforcement,” concluded the lawmakers. The letter was also signed by Senators Sheldon Whitehouse (D-R.I.),

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