AICPA Pushes Back on Treasury, IRS’ Overreaching Final Regulations
Washington, D.C. (March 3, 2025) – The American Institute of CPAs (AICPA), in a letter submitted to the Department of the Treasury and Internal Revenue Service (IRS), is recommending the immediate suspension and removal of final regulations which identify certain partnership related-party basis adjustment transactions as transactions of interest (TOI), a type of reportable transaction.
A guidance package was issued in June of 2024 targeted to related parties and partnerships using structured transactions to take advantage of the basis-adjustment provisions of subchapter K. At that time, the AICPA submitted recommendations urging a refinement of the rules. Final regulations were subsequently issued. As currently written, these final regulations will result in an undue burden to taxpayers and their advisors.
In its latest comment letter, the AICPA urges immediate suspension and removal of the final regulations due to the impractical provisions and administrative burdens it imposes.
The final regulations cover routine, non-abusive transactions, provide an unreasonably low threshold, and impose an unreasonably short 180-day deadline for taxpayers to file Form 8886, Reportable Transaction Disclosure Statement, for transactions related to previously filed tax returns due to the six-year lookback window. Additionally, advisors have only 90 additional days beyond the standard reporting deadline to file Forms 8918, Material Advisor Disclosure Statement.
“These final regulations continue to be overly broad, troublesome, and costly, which places an excessive hardship on taxpayers and advisors without a meaningful corresponding compliance benefit or other benefit to the government,” says Kristin Esposito, AICPA Director, Tax Policy & Advocacy. “These regulations exceed their intended scope, especially due to the retroactive nature.”
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with 400,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. AICPA sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives continuing education to advance the vitality, relevance and quality of the profession.
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Background
October 3, 2024 - Basis-Shifting Transaction Involving Partnerships and Related Parties
Contact: Veronica L. Vera
202-434-9215
Veronica.Vera@aicpa-cima.com