As a follow up to my colleague George Connelly’s earlier post concerning the IRS’s recently announced “Global High Wealth” Industry Group, I offer some further thoughts on what the IRS is attempting to do with this new group focusing on wealthy individuals. The IRS recently announced that the group has issued its first batch of audit letters and the audits of wealthy individuals will soon commence.
The IRS has created the group in the LMSB division, which generally handles audits of the largest corporations under a “team” audit concept. A team audit means that the IRS assigns several agents to the case, including, where appropriate, specialists in areas like international taxes, financial products, and employment taxes, as well as engineers and economists.
The IRS is concerned with very wealthy individuals who own multiple entities using complicated structures to avoid U.S. federal income taxes. The individuals may be operating foreign businesses or may have foreign investments through foreign trusts, partnerships, or corporations.