IRS Goes After Wealthy With Global High Wealth Exam Group
The IRS has decided to go after the wealthy in a big way. It is launching a new division known as the Global High Wealth Exam Group that will have this sole purpose.
The IRS has long had a feared reputation for taking taxpayers, chewing them up and spitting them out when it comes to audits. Study after study revealed an odd thing, however. The agency had a tendency to focus on the middle or lower class, not the wealthy. That is about to change.
The IRS was successful a few years back in finally breaking through the Swiss banking shield that many Americans were hiding behind. The agency was undoubtedly surprised to find that a whopping 15,000 high wealth taxpayers came for and “voluntarily” reported their overseas accounts to avoid jail time in the investigation. This has apparently resulted in a change in tactics for the agency.
The Global High Wealth Exam Group is already being given a nickname by accountants and tax lawyers. It is the “wealth squad”. The name is apt because the sole purpose of the exam group is to go after high wealth individuals that stuff money to and fro here and across the globe, but fail to make the appropriate tax payments. The squads will consist of revenue agents and experts in the particular financial tools that the taxpayer in question will be using. These are going to be long, expensive and painful audits.
Your initial reaction to this may be the same exact one that I had. Ummm…what constitutes a “wealthy” person? The bad news is the IRS has not indicated what that figure will be. The good news is the Commissioner of the agency has cited numbers in the “tens of millions”, which obviously excludes most of us.
Will the wealth squads make a big difference in revenues collected by the IRS? I doubt it, but there is some comfort in knowing the very wealthy will face the same level of audits that you and I do.