U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), the Chairman of the House Ways and Means Subcommittee on Oversight, today urged the U.S. Treasury Department to expand efforts to crackdown on tax abuse by wealthy families. Specifically, Pascrell called on U.S. Treasury Secretary Janet Yellen to issue regulations on irrevocable grantor trusts to limit rampant abuse of the infamous stepped-up basis tax loophole, which is used by some of the wealthiest Americans as a vehicle to avoid paying their fair share. Chairman Pascrell is the primary sponsor of H.R. 2286, legislation that would finally close the billionaires’ bonanza stepped-up basis loophole.
“The most glaring loophole in today’s income tax base is the ability of heirs to obtain tax-free stepped-up basis on appreciated assets they inherit upon the death of a taxpayer…. [T]he Department of the Treasury and the Internal Revenue Service under current law can take targeted actions to limit or even eliminate strategies that wealthy individuals and families use to exploit the stepped-up basis loophole,” Chairman Pascrell writes Secretary Yellen. “[I]t is imperative that wealthy individuals’ exploitation of the stepped-up basis loophole in the tax code be shut down where it can be, by prompt and aggressive regulatory action where there is a firm basis in law to do so.”
On December 7, 2021, Pascrell convened an oversight hearing on how wealthy families increasingly transfer property for generations to avoid ever paying taxes on vast fortunes. The hearing shed new light on how Americans are using states likes South Dakota and Wyoming over Switzerland and the Cayman Islands as favored tax havens to hide their money right within U.S. borders.
The text of Chairman Pascrell’s to Secretary Yellen is here.
- Accounting Today, Congressman Prods Treasury to Clamp Down on Grantor Trusts
- Insider NJ, Pascrell Pushes Treasury to Crackdown on Billionaire Tax Abuses
- Law 360, Treasury Urged To Clarify Rules On Trust Treatment
(Hat Tip: Daniel Hemel)
