Washington, D.C. –Senate Finance Committee Chair Ron Wyden, D-Ore., unveiled draft legislation to close loopholes that allow wealthy investors and mega-corporations to use pass-through entities, primarily partnerships, to avoid paying their fair share of taxes.
Seventy percent of partnership income accrues to the top 1 percent. Current partnership tax rules are too complicated for the IRS to enforce, turning partnerships into a preferred tax avoidance strategy for wealthy investors and mega-corporations. Although computers can check a wage earner’s return, the IRS needs highly-skilled specialists to audit partnerships. It audited only about 0.03 percent of the partnership returns filed for tax year 2018.
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