IRS Launches Unit Aimed at Nabbing Wealthy Tax Cheats


irsAudits are underway at a new Internal Revenue Service unit set up to catch rich tax cheats hiding funds in tax shelters, but don’t expect a flood of evaders to come to light any time soon.The chief of the new group said audits have begun in the last several months, but none have been wrapped up yet.

The so-called global high wealth unit, created late last year, takes aim at individuals hiding income using complex business structures, and is focusing on trusts, real estate, and other business entities controlled by individuals with assets in the tens of millions of dollars and more.

“The IRS is paying close attention to this population,” Donna Hansberry told Reuters on Thursday.

The agency is taking a measured approach, according to Hansberry, an IRS veteran who spent nearly two decades as a trial attorney in the Chicago IRS office.

“We’ve opened audits on a number of individuals and several of their related entities,” she said, when asked about the scale of the operation so far.

“What we’re doing is looking at the population, and putting the individual cases through risk assessment to determine what do we think would be a good case for audit,” she said.

A key change from the agency’s earlier approach is that the agency is looking at the individual and their business structures together.

“The primary reason for this being set up was to get a holistic view of the taxpayer,” she said. “We are seeing in some of the initial audits some true complexity.”

The new unit is part of a broader effort aimed at the wealthy and corporations evading taxes that has been emphasized by IRS Commissioner Douglas Shulman.

A key part of that effort is the government’s legal cases against Swiss banking giant UBS AG (UBSN.VX). UBS agreed to turn over nearly 5,000 names of individual American clients and pay $780 million to settle the tax evasion cases.

Also, more than 15,000 individuals came forward and declared income for lowered penalties under an amnesty program that ended last year.

Hansberry said it was too soon to comment on whether those with income abroad were a big part of the group her unit is auditing.

Tax authorities in Japan, Germany and the United Kingdom have also created similar units.

The IRS is also opening new criminal offices in Beijing, Panama City and Sydney, to focus on funds flowing out of Europe, in part because of a heightened focus on international enforcement in Europe.

{Yahoo News/Noam Newscenter}