IRS Brings New Focus to Auditing the Rich

Discussion in 'Wall St. News' started by TraderZones, Oct 26, 2009.

  1. How to drive out the wealthy??? :mad:

    IRS Brings New Focus to Auditing the Rich


    WASHINGTON -- A new Internal Revenue Service enforcement unit targeting the very wealthy will help the tax agency decode partnerships, offshore trusts and other complex techniques used to hide income, IRS Commissioner Doug Shulman said Monday.

    Dubbed the Global High Wealth Industry group, the unit will launch "a small number" of audits of individuals with assets or income in the tens of millions of dollars, Mr. Shulman told an accountants' trade group. An IRS official said the group would begin work on these initial audits in the next month.

    The high-wealth group, housed in the IRS's large- and medium-sized business division, marks a sharpening of the IRS approach to auditing the very wealthy. Its creation is a response to the complex web of entities and transactions many high-net-worth individuals use to manage their financial affairs.

    "You cannot assess compliance among the nation's wealthiest individuals by looking only at their 1040s [tax returns]," Mr. Shulman said. "Our goal is to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliance of that overall enterprise."

    Wealth advisers questioned how much the new IRS approach adds, since in some cases, even under the old structure, an audit of a high-net-worth person may have looked across multiple income sources and asset classes.

    However, "audits can sometimes be quite insular and silo-like," said Ronald Aucutt, a partner at the law firm of McGuire Woods. In particular, gift-tax audits and income-tax audits are usually not coordinated, he said.

    The reorganization is part of a multifront IRS effort to crack down on tax evasion by wealthy Americans. The agency is now sifting through the results of a partial amnesty program that netted 7,500 disclosures by Americans who held offshore accounts.
  2. Lucrum


    I'd be happy if they just audit those GD politicians. ALL of them.
  3. jprad


    If my aunt had balls she'd be my uncle...
  4. sub0


    The IRS has been going after the rich for a very long time now, this really isn't nothing new. If anything they are just increasing their staff. It's been said for a long time that they don't have enough manpower to really investigate most things that need to be investigated. This just proves that since they are JUST now ramping this up. And even then, look how high the bracket starts at. One thing that the rich have is damn good lawyers and accountants. I'm sure they won't have a whole lot to worry about.
  5. They do, it doesn't mean jack shit. Rangle comes to mind.