As Expected, IRS is Removing Basis Shifting Regulations Issued in January, 2025

IRS Notice 2025-23 announces intent to remove Final Regulations on Basis Shifting issued earlier this year

Photo by Benjamin Davies on Unsplash

The previous administration had issued final regulations in January of this year that would have required any related party basis shifting involving partnership transactions over a threshold to report these transactions to the IRS and face penalties if not reported.

The IRS just released Notice 2025-23 indicating they will be removing those final regulations and not imposing any penalties for not reporting those transactions.