Notice 2025-23: Intent to propose removal of partnership basis shifting TOI regulations and withdrawing Notice 2024-54
Taxpayers and material advisors can rely on the provisions of Notice 2025-23 until the notice of proposed rulemaking is finalized.
The IRS this afternoon released Notice 2025-23 announcing that the U.S. Department of the Treasury and IRS intend to publish a notice of proposed rulemaking (NPRM) proposing to remove the basis shifting transactions of interest (TOI) regulations (read TaxNewsFlash) from the Income Tax Regulations (26 CFR part 1).
Today’s notice provides immediate relief from the following penalties:
- Penalties under section 6707A(a) to participants in transactions identified as transactions of interest in the basis shifting TOI regulations that are required to file disclosure statements under section 6011
- Penalties under sections 6707(a) and 6708 for material advisors to transactions identified as transactions of interest in the basis shifting TOI regulations that are required to file disclosure statements under section 6111 and maintain lists under section 6112
In addition, Notice 2025-23 withdraws Notice 2024-54, which describes certain proposed regulations that Treasury and the IRS intended to issue addressing partnership related-party basis shifting transactions
The NPRM will have a proposed applicability date of April 17, 2025. Taxpayers and material advisors can rely on the provisions of Notice 2025-23 until the NPRM is finalized.
KPMG observation
This notice provides relief for taxpayers and their advisors given the effort that was required to comply with the final regulations.