Senate Introduces “Close the Round-Tripping Loophole Act” to Enhance Tax Integrity
Washington D.C. – A new piece of legislation aimed at bolstering the integrity of the U.S. tax system has been introduced in the Senate. Titled the “Close the Round-Tripping Loophole Act,” Senate Bill 2021 (S. 2021), was officially published by GovInfo.gov on August 15, 2025, at 12:40 PM. This proposed act seeks to address specific tax loopholes that allow for the artificial manipulation of financial transactions, often referred to as “round-tripping.”
The core objective of S. 2021 is to prevent companies and individuals from engaging in transactions that appear to generate artificial losses or credits, thereby reducing their tax liabilities in a manner that does not reflect genuine economic activity. The practice of “round-tripping” typically involves selling an asset and then immediately repurchasing it, or engaging in a series of transactions that effectively return the original asset to its owner with the primary purpose of generating a tax benefit.
While specific details of the legislative text will become clearer as the bill progresses through the legislative process, the title itself strongly suggests a focus on closing avenues that permit the artificial creation of tax disadvantages through circular financial arrangements. Such loopholes can erode the fairness of the tax system and deprive the government of much-needed revenue that could be allocated to public services and investments.
Supporters of the bill, likely including tax policy experts and advocates for fiscal responsibility, would argue that closing such loopholes is essential for a more equitable and robust tax code. By ensuring that tax benefits are tied to genuine economic substance rather than artificial constructs, the legislation aims to create a more level playing field for all taxpayers.
The introduction of S. 2021 signifies a proactive step by lawmakers to identify and address potential vulnerabilities within the existing tax framework. As the bill moves through the Senate, it will likely undergo committee reviews, public hearings, and potential amendments, allowing for thorough examination and debate on its merits and implications. The passage of such legislation would represent a significant effort to enhance tax compliance and preserve the integrity of the U.S. tax system for the benefit of all citizens.
S. 2021 (IS) – Close the Round-Tripping Loophole Act
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