Senators Oppose Removing Partnership Basis Adjustment Reporting

Senator Elizabeth Warren (D-MA) and five Senate colleagues urged Secretary Bessent and Assistant Secretary for Tax Policy Kenneth Kies to withdraw a March 6, 2026, notice of proposed rulemaking (NPRM) that would eliminate a reporting requirement for related-party partnership basis adjustment transactions.

In their letter, the senators wrote that the NPRM “will remove a simple reporting requirement, which will neutralize one of the few remaining tools available to the IRS to spot abusive partnership transactions.”

Under longstanding IRS rules, partners and partnerships may (and in certain cases must) adjust the tax basis of property following certain transactions. Some businesses and high-net-worth individuals, the senators contended, have used complex partnership structures to apply these basis-shifting rules and create “significant tax savings without real costs or changes in economic position.”

To dig deeper, visit the original article on the Thomson Reuters blog.