The IRS wants to end a game of financial hot potato.

For Marketplace, I'm Novasafo and for David Brancaccio.

Partnership basis shifting sounds complicated, but the the IRS says for many high-income

earners and big businesses it's simply a tax dodge. The process involves

using various legal entities which often exist only on paper, to move assets around.

The goal is to avoid a big tax bill.

The agency is proposing new rules to essentially end the practice.

Marketplace's Stephanie Hughes explains.

Businesses own certain things like equipment that qualify as tax write-offs.

They also own assets like land that can't be written off.

The money, each of these things cost, is what's known as its tax basis.

And some businesses will shift that basis from one asset to another to lower their tax bills.

It is a scheme.

U.S. Deputy Treasury Secretary Wally Adayama says the government is going to go after people that do this.

This is something that can only be pulled off frankly by the wealthiest of wealthy taxpayers because it takes an army of

accountants and lawyers to set up this type of partnership structure.

So the government will be collecting more information about partnerships above five

million dollars. Matthew Gardner is with the Institute on Taxation

and Economic Policy.

So what they want to do is more closely examine these basically illegitimate transactions to identify the ones that have

economic substance and the ones that don't. By closing this loophole the Treasury

estimates it could raise more than 50 billion dollars over 10 years.

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