IRS Crackdown on Abusive Basis-Shifting Transactions: Key Issues for Taxpayers and Managing IRS Examination
Related-Party Basis Adjustment Guidance, Transactions of Interest, Reporting Requirements, Economic Substance Doctrine

Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Tax Law
- event Date
Wednesday, November 13, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
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BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
This CLE/CPE course will provide tax professionals with comprehensive guidance on recent IRS focus on abusive basis-adjustments transactions and navigating applicable tax rules and IRS examinations. The panel will discuss the potential application of the rules and proposed regulations, IRS challenges to surrounding basis adjustments, Notice 2024-54 and forthcoming regulations addressing basis-shifting transactions for partnerships and related parties, and Rev. Rul. 2024-14 and the economic substance doctrine, as well as offer practical tips to avoid costly and unanticipated tax consequences.
Faculty

Mr. Stein specializes in tax controversies, as well as tax planning for individuals, businesses and corporations. For more than 25 years, he has represented individuals with sensitive issue civil tax examinations where substantial penalty issues may arise, and extensively advised individuals on foreign and domestic voluntary disclosures regarding foreign account and asset compliance matters. Mr. Stein is well respected for his expertise and judgment in handling matters arising from the U.S. government’s ongoing enforcement efforts regarding undeclared interests in foreign financial accounts and assets, including various methods of participating in a timely voluntary disclosure to minimize potential exposure to civil tax penalties and avoiding a criminal tax prosecution referral. Mr. Stein is a frequent lecturer at national and regional conferences on topics including tax compliance sensitive issues, IRS examinations, State and Federal worker classification issues, etc.

Mr. Toscher has been representing clients for more than 35 years before the Internal Revenue Service, the Tax Divisions of the U.S. Department of Justice and the Office of the United States Attorney, numerous state taxing authorities and in federal and state court litigation and appeals. Mr. Toscher enjoys a unique combination of solid criminal defense experience and extensive substantive tax experience to assist individuals and entities subject to sensitive government inquiries. He has considerable experience as lead counsel in defending criminal tax fraud investigations (both administrative and grand jury investigations) as well as in defending criminal tax prosecutions (both jury and non-jury). Mr. Toscher’s tax practice includes a wide array of substantive areas including income taxes, estate taxes, employment taxes, sales taxes and property taxes. He is routinely involved in sensitive issue or complex civil tax examinations and administrative appeals on behalf of wealthy individuals and their closely held entities as well as large corporations involving both domestic and foreign tax related issues.

Mr. Horwitz has over 35 years of experience as a tax attorney specializing in the representation of clients in civil and criminal tax cases, including civil audits and appeals, tax collection matters, criminal investigations, administrative hearings and in civil and criminal trials and appeals in federal and state courts. He has served as a member of the Executive Committee of the Taxation Section of the State Bar of California and was Chair of the Taxation Section for 2015-2016 year. Mr. Horwitzwas previously Chair of the Tax Procedure and Litigation Committee of the State Bar Taxation Section. Prior to joining Hochman Salkin Toscher Perez P.C., Mr. Horwitz was with a boutique tax controversy firm in Orange County, where he represented clients in civil and criminal tax cases in the U.S. Courts of Appeal, U.S. district courts, California superior courts, and before the Internal Revenue Service, the California Franchise Tax Board, the Board of Equalization, the Employment Development Department and the Unemployment Insurance Appeals Board. He has been a speaker on tax matters at the UCLA Tax Controversy Institute, the Annual Meeting of the Taxation Section of the California Bar and the California State Bar Annual Meeting. Mr. Horwitz has authored articles on tax law that have appeared in diverse publications, including Tax Notes, the Federal Lawyer (the publication of the Federal Bar Association), and the California Tax Lawyer. His monograph in “Responsible Persons and Fiduciary Liability” was published in the Proceedings of the New York University 75th Institute on Federal Taxation. Mr. Horwitz was an invited delegate to the 2015 U.S. Tax Court Judicial Conference. He is a member of the Planning Committee of the UCLA Tax Controversy Institute. Mr. Horwitz is a member of the bar in California and in Illinois. He is admitted to practice in the United States District Courts for the U.S. Supreme Court, the U.S. Courts of Appeal for the Seventh, Ninth and Federal Circuits, the U.S. District Courts for the Central, Southern, Northern and Eastern Districts of California, the U.S. Court of Federal Claims and the U.S. Tax Court. He was named a Southern California Super Lawyer 2010, 2011, 2012, 2014, 2015, 2016, 2017 and 2018.
Description
Determining the tax consequences of the distribution of assets by a partnership to a partner is a constant challenge for tax counsel and advisers. Section 754 provides an election allowing a partnership to adjust the basis of its assets when the partnership either distributes assets or a partner transfers an interest in the partnership. However, on June 17, the IRS released guidance specifically aimed at "basis shifting" transactions among related partners of a partnership.
The basis adjustment can have a significant impact when a partnership has an existing 754 election and admits a new partner, has one partner sell a partnership interest, or when the partnership makes a distribution to a partner. The election and adjustments can have different impacts on different partners, so tax advisers need to fully grasp the tax implications of making the election and utilizing the optional basis adjustments.
However, on June 17, 2024, the IRS and Treasury issued Notice 2024-54 (the Notice) detailing proposed regulations they intend to issue relating to certain related party partnership transactions along with specific reporting requirements. In addition, the IRS issued Rev. Rul. 2024-14 (the Revenue Ruling) that applies the economic substance doctrine to certain transactions in audits, appeals, and litigation to deny the tax benefits from certain basis-shifting transactions involving a related-party partnership. The Notice and Revenue Ruling will significantly impact tax planning for many partnerships and related parties.
Listen as our panel discusses the key issues when structuring basis adjustment transactions, Notice 2024-54 and forthcoming regulations addressing basis-shifting transactions for partnerships, Rev. Rul. 2024-14 and economic substance doctrine, and practical tips to avoid costly and unanticipated tax consequences.
Outline
- Structuring basis adjustment transactions
- Notice 2024-54
- Revenue Ruling 2024-14
- The mechanics of a Section 754 election
- Inside and outside basis issues
- Best practices in light of proposed regulations
Benefits
The panel will discuss these and other key issues:
- Structuring basis adjustment transactions for partnerships in light of Notice 2024-54 and Rev. Rul. 2024-14
- Understanding Notice 2024-54 special basis recovery and realization rules
- Application of the Economic Substance Doctrine under Rev. Rul. 2024-14
- Benefits and disadvantages of making the 754 basis election
- Impact of the 754 election on individual partners and the partnership
- Rules governing step-up and step-down basis adjustments
- Rules for allocating basis adjustments
- Common pitfalls in basis adjustments, and what practitioners can do to avoid these pitfalls
NASBA Details
Learning Objectives
After completing this course, you will be able to:
- Understand key tax issues when structuring basis adjustment transactions in light of Notice 2024-54 and Rev. Rul. 2024-14
- Recognize critical special basis recovery and realization rules applicable to transactions with related parties
- Identify the basis adjustments--both mandatory and optional--that accompany a Section 754 election
- Determine how specific basis adjustments accompanying a 754 election impact existing partners
- Discern the ordering rules governing the allocation of basis adjustments under the election
- Recognize the planning and strategic considerations in deciding whether to make a 754 election
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Working knowledge of partnership or corporate structure, operating agreements, and shareholder agreements.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
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