Home » FAQ’s » IRS Wealth Squads

IRS Wealth Squads

IRS Wealth Squads

Newly created IRS Wealth Squads exam teams will scrub wealthy taxpayers’ hedge funds, trusts, and foreign accounts.
Those who by anyone’s measure would be considered wealthy should be on notice: How you acquired and now maintain the wherewithal to be so labeled may soon be called into question by the Internal Revenue Service. That’s not to say that the questions can’t be answered and the matter closed with no further tax due, but the means to that end could get complicated.
Last Fall, IRS Commissioner Doug Shulman unveiled his vision for a Global High Wealth Exam Group—the latest addition to the agency’s arsenal of compliance strategies. Its goal is to ensure that these high-end Form 1040 filers are not shirking their federal tax responsibilities. While the exact amount of “wealth” that will arouse IRS interest was not disclosed, the Commissioner suggested a threshold in the neighborhood of tens of millions of dollars. According to the most recently released IRS estimates, in 2004 there were approximately 47,000 individual taxpayers with a net worth of $20,000,000 or more. Where does your net worth rank? That some of these taxpayers play fast and loose with regard to federal taxes should come as no surprise, given the deluge of news stories last year revealing the extent to which the well-off in the U.S., as well as other countries, secreted assets in offshore accounts to avoid the prying eyes of revenue bodies worldwide. By last November, in the U.S. alone, almost 15,000 individuals had “voluntarily” reported to the IRS previously undisclosed foreign bank accounts. However, as troublesome as this behavior is, it alone is not the principal factor for this new program. Instead, it is the scope and complexity of the tax planning in which such individuals engage that challenges the current exam strategy and dictates a different approach for certain wealthy taxpayers. Gone are the days when Forms 1040 filed by such taxpayers reported for the most part, wages, dividends, interest, capital gains, and perhaps distributions from a law firm, accounting firm, business partnership, or small business corporation. Instead, they now often reflect the taxpayer’s participation in such ventures as multi-tiered partnerships, trust arrangements, private equity and hedge funds, and private foundations. To complicate matters from an IRS exam perspective, many of these entities in whole or in part are foreign-based. To expect one revenue agent to verify that a return reflects the proper tax treatment of such an economic enterprise is unrealistic. Thus, make way for the “wealth squads” from the new Global High Wealth Exam Group. They will be armed with agents with the necessary skill sets to examine these situations in a holistic manner. In other words, the individuals as well as their related entities may be examined to ensure that not only income amounts but also the transactions and relationships from which they arise have been properly accounted for and reported for federal tax purposes. While it will take some time to get this organization fully staffed, there are exam teams already up and running.


IRS 'Wealth Squads' On The Way

Newly created IRS Wealth Squads exam teams will scrub wealthy taxpayers' hedge funds, trusts, and foreign accounts.
Share on facebook
Share on twitter
Share on linkedin
Virtual Bookkeeper, Miami Bookkeeper Services, Miami Bookkeeper, bookkeeping services in Miami, bookkeeping, Bookkeepers in Miami, Bookkeepers, Bookkeeper


Bookkeeper oversees financial data maintaining financial transactions by establishing accounts; posting transactions; ensure legal requirements compliance

Read More »
Virtual Accountant

Virtual Accounting Services Will Save You Money

Accounting to a non-financial person can be a mammoth task according to Accountants in Miami, CPA. Wading through invoices, bank statements amongst other duties can be quite tasking especially for small business owners who have a lot of other things to do. Even businesses that have an in-house accounting team still need to manage the functions of the accounting team to ensure they meet the business objectives at a minimal cost.

Read More »
tax planning,Small Business CPA in Miami,Small Business CPA,small business accounting software,small business accounting software,small business accounting software,Personal Accountants Near Me,Outsourced Accountants,New business incorporation,IRS representation,How much money does an Accountant charge for a small business,CPA Firm,CPA,Corporate Tax Preparation,consulting,compiled financial statements,certified public accountant,Cash flow management,Bookkeepers,Best tax accountants near me,audit,AHCA Proof of Financial Ability to Operate,AHCA HHA Home Healthcare Agency Business Plan,AHCA,Accounting Services,accounting firm,accounting and tax services,Accounting and bookkeeping,Accountants,Accountant

Small Business CPA

Small Business CPA in Miami Accounting & Tax Services competes with Accountants in Miami and loses due to the higher hourly and flat fee they charge clients

Read More »

Share Page

Scroll to Top