Brand Logo
Taxing the rich, Putin in Pyongyang and Celtics' sweet 18

 
Today's FINANCE story

IRS seeks to close loophole used by ultra-wealthy

What happened
The Internal Revenue Service and Treasury Department launched a new initiative Monday aimed at closing a significant tax loophole often used by the super wealthy. The IRS said ending "partnership basis shifting," in which financial assets are shuttled through related corporate entities to avoid being taxed, could capture at least $50 billion in revenue over the coming decade.

Who said what
"Wealthy taxpayers and businesses are paying accountants and lawyers millions of dollars to develop these complex, abusive transactions," the IRS said. Years of underfunding limited the government's ability to audit such transactions as well as multimillionaires and large corporations more generally.

Legally, basis shifting transactions must have "'economic substance' rather than merely reducing tax bills," The Washington Post said. That requirement is the "root of the agency's belief" that most of those transactions are illegal tax dodges.

The new initiative is funded through the Biden administration's Inflation Reduction Act, which featured programs "aimed at improving tax compliance among big corporations and wealthy Americans and shrinking the estimated $600 billion tax gap" between money owed and paid, Fox News said. That influx in funds has "elicited fierce pushback from Republicans" claiming it will contribute to government overreach.

What next?
The new initiative is on shakier legal ground than if Congress had acted, The Wall Street Journal said. And with Republicans pushing for more IRS cuts, "the fate of the agency's budget — and its tougher enforcement push — hinge on November's elections."

 
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more with a subscription to The Week.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us
 
Today's international story

Putin visits North Korea amid hunt for weapons

What happened
Russian President Vladimir Putin is traveling to Pyongyang on Tuesday for a two-day visit with North Korean leader Kim Jong Un. Putin is making his first trip to North Korea since 2000 as "Moscow is hungry for munitions" to use against Ukraine, The Washington Post said. Putin hosted Kim in far-eastern Russia last September.

Who said what
Putin said in an op-ed in North Korean state media Monday that Moscow and Pyongyang will develop trade and security systems "not controlled by the West" and thanked North Korea for "firmly supporting" his war in Ukraine.

The U.S. and South Korea have repeatedly said that support includes "providing Russia with artillery, missiles and other military equipment," possibly in return for "key military technologies and aid," The Associated Press said. North Korea and Russia deny trading arms.

What next?
"We're not concerned about the trip," White House national security spokesperson John Kirby said, just the "deepening relationship between these two countries." The Ukraine war has drawn Moscow and Pyongyang closer together, but "there is too much mutual distrust between the two countries" for a lasting alliance, Andrei Lankov, an expert on Russia–North Korea relations, told the Post.

 
 
Today's SPORTS Story

Boston Celtics win record 18th NBA title

What happened
The Boston Celtics won a lopsided 106-88 victory over the Dallas Mavericks in Game 5 of the NBA Finals on Monday, giving Boston a record 18th NBA title and its first championship since 2008. Archrivals the Los Angeles Lakers have 17 titles. 

Who said what
"It means the world," said Jayson Tatum, one of the Celtics' two pillars, along with Finals MVP Jaylen Brown. "It's been a long time."

Despite their dominance this year, these "Celtics were never fawned over quite like super teams of the past," The Washington Post said. For one thing, "they lacked an all-time icon such as Michael Jordan, Shaquille O’Neal or Stephen Curry." When data-obsessed Boston's roster of "versatile, largely interchangeable players" faced Dallas superstar Luka Doncic, the NBA's leading scorer this season, The Wall Street Journal said, "the series became system vs. superstar — and the system won out."

What next?
The Celtics "will return more or less intact" next season, Zach Lowe said at ESPN, and if they stay healthy, "they will have everything they need" to win a rare repeat championship and "cement their place as one of the great teams of the modern era."

 
 

It's not all bad

A farmer in Northern Ireland spent years creating a habitat for barn owls, building nest boxes and planting bushes and trees to attract prey, and his hard work paid off. A pair of barn owls made David Sandford's property their home and have since welcomed 15 owlets. This is a major accomplishment, as fewer than 30 breeding pairs are believed to live in Northern Ireland. It's a "barometer that we are doing some things right on our farm," Sandford told The Standard.

 
 
Under the radar

The number of reported dog bites has increased significantly since the beginning of the Covid-19 pandemic. And while those bites may not always be fatal, the number of attacks resulting in deaths is also rising. 

In the past decade, fatal dog attacks ballooned "from an average of roughly 40 a year to nearly 100 after the pandemic hit," USA Today said, citing statistics from the U.S. Centers for Disease Control and Prevention (CDC). The total number of dog bites has jumped to "untold millions today" from the "most recent estimate, 20 years ago, of 4.5 million."

The pandemic-related increase in bites is "likely to be associated with stay-at-home orders, bringing dogs and children together for longer periods of time and perhaps in closer quarters," said a study published in the Journal of Craniofacial Surgery in 2022. Dogs that were "raised during the pandemic missed out on crucial socialization and interaction with other dogs as they holed up with their owners," Jim Crosby, a research associate at Harvard University's Canine Aggression Project, said to USA Today. 

There are ways to stave off potential attacks. The most risky situations include "leaving an infant or toddler alone with any breed of dog, and new or temporary living situations involving children and dangerous dog breeds," said Dogsbite.org. The organization also noted that you should "not pet a dog without first letting it see you, even if you know the dog," and "do not lean your face close to a dog."

 
 
On this day

June 18, 1983

Astronaut Sally Ride was launched into orbit aboard the space shuttle Challenger, making her the first American woman in outer space (and the third woman overall). Ride flew on another shuttle mission in 1984 and later became a physics professor. She died of pancreatic cancer in 2012 at age 61.

 
 
TODAY’S newspaperS

Boston's crushing victory over the Dallas Mavericks on Monday earned the Celtics a record 18th NBA title — "Sweet 18," The Boston Globe says — ending a 16-year championship drought and prompting "a pure eruption of pent-up joy from team faithful." For the Mavs, who won their one and only NBA title in 2011, this was the "end of the trail" in a "dream season" that "just didn't have enough horsepower," The Dallas Morning News says. The Wall Street Journal, which has a photo of Boston's victory at the top of Tuesday's front page, leads with the "political battle" over corporate tax rates between President Joe Biden and Republicans.

► See the newspaper front pages

 
 
Tall tale

Counting to No. 2

At China's popular Yungang Grottoes, timers have been placed over the toilet stalls in the women's restroom. Officials say the timers could help indicate medical emergencies and are not intended to make visitors speed up their bathroom breaks, but the reaction has been mixed. "I found it quite advanced technologically so you don't have to queue outside or knock on a bathroom door," one visitor said to CNN. "But I also found it a little bit embarrassing. It felt like I was being monitored."

 
 

Morning Report was written and edited by Theara Coleman, Nadia Croes, Catherine Garcia, Scott Hocker, Anya Jaremko-Greenwold, Justin Klawans, Harold Maass, Devika Rao, Rafi Schwartz and Peter Weber, with illustrations by Stephen Kelly and Julia Wytrazek.

Image credits, from top: Visual Capitalist via Getty Images; Mikhail Metzel / Pool / AFP via Getty Images; Brian Babineau / NBAE via Getty Images; Illustration by Julia Wytrazek / Getty Images