During his testimony before the House Appropriations Committee, IRS Commissioner Danny Werfel detailed the agency's plan to target a major tax loophole utilized by large partnerships. The loophole in question involves the manipulation of asset purchase prices between related entities to avoid taxes, allowing wealthy taxpayers to underpay. The Treasury and IRS project that closing this loophole could generate over $50 billion in additional tax revenue over the next decade. The agencies plan to issue proposed regulations and a revenue ruling to prevent basis shifting without economic substance or substantial business purpose. This initiative is part of a broader effort to increase tax audits on the wealthiest individuals, corporations, and partnerships to enhance tax fairness and reduce the deficit. U.S. Secretary of the Treasury Janet Yellen emphasized the importance of addressing high-end tax abuse in all forms to achieve these goals.