New IRS Initiative Targets Certain High-Net-Worth Individuals

The government believes that some wealthy individuals stash funds abroad and engage in complex transactions as a way to hide income and evade taxes. An amnesty program for individuals to report their foreign bank accounts or face IRS penalties expired on October 15; about 7,500 individuals came forward under this program. Now, IRS Commissioner Shulman has announced the launch of a new program to find tax evaders among wealthy individuals who keep money overseas but don’t report their foreign accounts. The new Global High Wealth Industry Group will be administered by the IRS Large and Mid-Size Business (LMSB) Division, but will not be limited to large and mid-size businesses. The IRS will look at high-net-worth individuals and the various business enterprises they may control. Only a small number of audits are expected under this initiative, but the targets will be those with tens of millions of dollars and could net significant revenue for the federal government.