IRS Tightening the Noose on "The Rich"
Taxes will be due soon. Good luck if you're rich. Seems you're in the IRS's cross hairs. I'm not surprised.
In fact, back in January of 2010, I posted a piece about how the IRS would be targeting the rich. (If interested, you can read it by clicking here.
Now, you may think it's pretty typical for the IRS to look to ding rich folks. After all, if you were looking for money, you go where the money is, right? And the IRS isn't any different.
But back in January 2010, I noted that something different was going on. The IRS formed a special group called the "Global Wealth Industry Group." They claimed they were hiring special agents to focus on complex tax structures designed to reduce or avoid taxes - the kind of tax structures promoted by certain segments of the accounting profession and financial services industry that only rich people can afford to pay for.
They claimed at the time that they were focusing on people worth "tens of millions." The IRS was looking to find out how they were planning to avoid taxes.
It sounded fishy to me at the time. The fact is, avoiding taxes is perfectly legal. It's tax evasions that's illegal. Tax avoidance isn't illegal. In fact, that's the whole point of tax planning, isn't it? You want to avoid paying taxes that you don't have to. Besides, why do you set up a new "group" within the IRS? Why not just hire some experts and do some research if all you're interested in is to find out how people avoid taxes?
So right away, I was suspicious. And now it seems that my suspicions were justified.
The Wall Street Journal published an article recently titled, "Rich Get Targeted in IRS Offensive." According to the article, "Accountants and tax preparers said the IRS's heightened scrutiny of wealthier taxpayers is in sharp contrast to the agency's audit practices during the previous decade."
They don't mention that "Global Wealth Industry Group" set up over a year ago. But it does seem that like that was just one part of an overall decision to really go after wealthy people. In fact, it seems anyone who made over $500,000 is considered a good target for an audit - quite a step down from the people worth "tens of millions" they said they were interested in last year.
Anyway, if you're making a really good living, get ready for a possible inquiry from your friends at the IRS. Oh, and they'll be asking you lots of questions if they come calling. One accountant provided the WSJ with a form that included over 60 questions that they demanded the client answer. And this wasn't necessarily someone who had clearly done something wrong. But the client had to spend the time and money to respond.
Of course, the problem with all this is that the IRS definition of "rich" can be pretty much what they want it to be. And since they've hired thousands of new agents over the last year, you can bet that definition will expand as time goes by. What did you think they hired all those folks for anyway.
In fact, back in January of 2010, I posted a piece about how the IRS would be targeting the rich. (If interested, you can read it by clicking here.
Now, you may think it's pretty typical for the IRS to look to ding rich folks. After all, if you were looking for money, you go where the money is, right? And the IRS isn't any different.
But back in January 2010, I noted that something different was going on. The IRS formed a special group called the "Global Wealth Industry Group." They claimed they were hiring special agents to focus on complex tax structures designed to reduce or avoid taxes - the kind of tax structures promoted by certain segments of the accounting profession and financial services industry that only rich people can afford to pay for.
They claimed at the time that they were focusing on people worth "tens of millions." The IRS was looking to find out how they were planning to avoid taxes.
It sounded fishy to me at the time. The fact is, avoiding taxes is perfectly legal. It's tax evasions that's illegal. Tax avoidance isn't illegal. In fact, that's the whole point of tax planning, isn't it? You want to avoid paying taxes that you don't have to. Besides, why do you set up a new "group" within the IRS? Why not just hire some experts and do some research if all you're interested in is to find out how people avoid taxes?
So right away, I was suspicious. And now it seems that my suspicions were justified.
The Wall Street Journal published an article recently titled, "Rich Get Targeted in IRS Offensive." According to the article, "Accountants and tax preparers said the IRS's heightened scrutiny of wealthier taxpayers is in sharp contrast to the agency's audit practices during the previous decade."
They don't mention that "Global Wealth Industry Group" set up over a year ago. But it does seem that like that was just one part of an overall decision to really go after wealthy people. In fact, it seems anyone who made over $500,000 is considered a good target for an audit - quite a step down from the people worth "tens of millions" they said they were interested in last year.
Anyway, if you're making a really good living, get ready for a possible inquiry from your friends at the IRS. Oh, and they'll be asking you lots of questions if they come calling. One accountant provided the WSJ with a form that included over 60 questions that they demanded the client answer. And this wasn't necessarily someone who had clearly done something wrong. But the client had to spend the time and money to respond.
Of course, the problem with all this is that the IRS definition of "rich" can be pretty much what they want it to be. And since they've hired thousands of new agents over the last year, you can bet that definition will expand as time goes by. What did you think they hired all those folks for anyway.
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