IRS Sets Sights on High Wealth Individuals

October 28, 2009 Offshore BankingOffshore TaxationTaxation in USA  No comments

Dough Shulman, US Internal Revenue Service (IRS) Commissioner, has revealed that the department has initiated a new audit program aimed at catching high-wealth tax cheats.

Speaking at a conference for the American Institute of Certified Public Accountants (AICPA) on the 26th of October, in Washington DC, Doug Shulman announced the creation of the Global High Wealth Industry Group (GHWIG). According to the IRS Commissioner, the unit will conduct “a small number” of audits on individuals with assets “in the neighborhood of $30 million”, with the primary aim of weeding out tax cheats who hide behind complex financial structures.

While claimed to be operational for a number of months, the new unit is expected to begin its initial audits in November. According to Doug Shulman, international tax specialists and flow-through experts have already been recruited by the IRS to aid in the detangling of the complicated web of partnerships, offshore trusts, royalty and licensing agreements, private foundations and flow-through entities that can be used for tax evasion.

The IRS Commissioner commented on the IRS’s new direction by saying that a “holistic” approach was needed to understand contemporary international tax evaders. He went on to say, “Our goal is to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliances of that overall enterprise,” and “We cannot do this by continuing to approach each tax return in the enterprise as a single and separate entity. We must understand and analyze the complete picture”.

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