Lawyers Renew Calls to Nix Controversial Partnership Guidance

A piece of IRS guidance related to the agency’s efforts to increase scrutiny on partnerships—which has been largely dismantled by the Trump administration—is still causing consternation among companies.

A revenue ruling released last April expands the IRS’s ability to use the economic substance doctrine in partnership audits. The ruling remains in effect even though the Treasury Department and IRS are scrapping other plans to crack down on a controversial partnership transaction.

The ruling was part of a Biden administration effort to prevent big partnership tax shelters, which was expected to raise billions of dollars. Former agency workers involved in the ...