An introduction to the IRS’s busy new group
The Global High Wealth Industry Group, also known as the “wealth squad,” is a team of experienced IRS specialists assembled specifically to audit wealthy taxpayers. Depending on your point of view, this crack squad is either a scheme by the current leaders directed against the wealthy or a sincere plan to put a dent in the national debt.
In any case, likely to find themselves in their cross hairs, initially, are those with assets or incomes of $10 million or more, who appear to have a complex financial structure. Don’t let your guard down if you are below that level, though, as audit rates are increasing for all high income earners.
How is the IRS and the wealth squad doing? According to the IRS, the percentage of taxpayers audited increased in every category of income over $500,000 compared with the prior year. In 2010, 18% of $10 million-a-year-plus earners were audited, up from 10% the previous year. A total of 12% of the $5-10 million income group was audited in 2010 compared with 6% in 2009. The IRS refuses to share information about their success rates and how much additional revenue has been realized via this new effort.
Nonetheless, reports in the Wall Street Journal, Bloomberg.com, and SmartMoney all point to wealth squad audits as the “audits from hell.” These IRS specialists are famous, or infamous, for endless questions and requests for a broad range of documentation. The IRS says they need detailed information to draw a complete picture of serpentine taxpayer money-hiding schemes. Those on the other side of the audits see only costly drawn-out correspondences and requests for stacks of peripheral and hard-to-get paperwork — all with short deadlines.
Whether your earnings are in the stratospheric hunting range of the wealth squad or not, everyone is vulnerable to being audited. However, we are here to even the playing field and make the process as painless as possible.
Call us as soon as you are notified of an audit so we can formulate a game plan for you.
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