On April 17, 2025, Treasury and the IRS issued Notice 2025-23 outlining their intent to remove the reporting requirements for certain partnership related-party basis adjustment transactions as transactions of interest (TOI). The TOI reporting requirements were required under final regulations (T.D. 10028) that were made effective January 14, 2025.
As a TOI, such transactions are required to be disclosed by the participants and material advisers to the transactions. Read our FORsights™ article, “Partnership Basis-Shifting Strategies in IRS Crosshairs,” for a more detailed explanation.
The notice provides the following:
- Immediate relief from penalties to those who are required to file disclosure statements
- The IRS intends to issue new proposed regulations to remove the TOI reporting requirements
- The proposed regulations will allow retroactive application to January 14, 2025
- Rescission of Notice 2024-54 which had announced the intent of Treasury and the IRS to publish proposed regulations governing related-party basis-shifting transactions
- Participants and material advisers in these transactions may rely on this notice until the final regulations are published
According to the notice, “The forthcoming [proposed regulations], when finalized, will obviate the need for participants and material advisors to comply with all of the transaction of interest requirements they would otherwise be required to follow because of the Basis Shifting TOI Regulations.”
For further information on the impact of this notice on your organization, please contact a professional at Forvis Mazars.