IRS plans to raise $50 billion over 10 years, closing loophole exploited by the wealthy

The IRS estimates it will raise more than $50 billion over the next decade by closing a loophole often exploited by wealthy filers seeking to avoid paying taxes.

The loophole allows such taxpayers, as well as businesses, to move assets between entities in a way that authorities say has no economic purpose. Deputy Treasury Secretary Wally Adeyemo called the practice “really just a shell game" in a statement.

The use of such pass-through businesses has nevertheless increased 70% from 2010 to 2019, and helped allow the top 1% avoid paying $160 billion in taxes, Treasury said. 

“Treasury and the IRS are focused on addressing high-end tax abuse from all angles, and the proposed rules released today will increase tax fairness and reduce the deficit,” U.S. Secretary of the Treasury Janet Yellen said in a statement.