It looks like there is another reason why the majority of people are better off than Warren Buffett. After decades worth of data, the clever crime fighters at the IRS think they may be on to something. As it turns out, most people who play elaborate games of hide-and-seek with some of their assets belong to the same tax bracket.
A new Internal Revenue Service enforcement unit targeting the very wealthy will help the tax agency decode partnerships, offshore trusts and other complex techniques used to hide income, IRS Commissioner Doug Shulman said Monday.
Dubbed the Global High Wealth Industry group, the unit will launch "a small number" of audits of individuals with assets or income in the tens of millions of dollars, Mr. Shulman told an accountants' trade group. An IRS official said the group would begin work on these initial audits in the next month.
Tax cheats beware, the special unit targeting you is onto the complex web you weave. Playing games on your 1040 is not going to get the job done any more. The IRS is taking a more "holistic" approach to you guys and will not stop until they've achieved their objective.
"Our goal is to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliances of that overall enterprise," (Schulman) said. "We cannot do this by continuing to approach each tax return in the enterprise as a single and separate entity. We must understand and analyze the complete picture."