IRS Brings New Focus to Auditing the Rich – WSJ.com

Posted by Jason | Posted in Government | Posted on 27-10-2009

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Treating the productive job creators of our society like criminals, the IRS is creating a new group to see if they can confiscate more money from the rich. Obama wants jobs so bad, he thinks if he can steal more money from the rich, they’ll decide they need to hire more accounts.

By MARTIN VAUGHAN

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.

Write to Martin Vaughan at martin.vaughan@dowjones.com

via IRS Brings New Focus to Auditing the Rich – WSJ.com.

What is it that makes the government believe they have a right to every red cent you have? I find it funny the article says the IRS has a hard time deconstructing the complex structures the rich setup. Have you ever looked at your damn tax code? Talk about complex structures. Money goes where it is treated best. The quicker our government learns that the more we can bring it back home.

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