IRS Unreported Income Recapture Programs
The IRS is cracking down on high-wealth individuals, creating a new enforcement unit, known as the Global High Wealth Industry Group, specifically designed to audit the financial affairs of individuals with $10 million or more in assets.
Audits undertaken by the Global High Wealth Industry Group will attempt to understand the entire financial picture of the high net worth individual, not simply the income reported on the individual’s 1040 but also looking for such assets as:
- Foreign bank account tax havens
- Offshore retirement accounts
- Business interests (sole shareholder or sole signatory) in a company holding a foreign account
- Overseas inheritance
- Foreign trust fund tax shelters
If the Global High Wealth Industry Group has contacted you for an audit, get sophisticated legal counsel from a firm that understands domestic and international tax law. Contact the international tax defense attorneys at Kundra & Associates, in Rockville, Maryland, for IRS audit defense and representation in criminal tax matters.
Changes In The Audit Process For High-Wealth Individuals
In the past, when the IRS conducted an audit, the auditor would review the information provided on the tax return before them. The IRS would not conduct an in-depth review of the information provided on an accompanying K1, nor would it review other business interests disclosed on the return. The IRS rarely conducted gift-tax audits and income-related tax audits in coordination.
Under this new process, the IRS will work to understand the entire economic picture of the wealthy individual, so the IRS agent can assess tax compliance across all income sources and asset classes. The agent may now ask for the books and records of any companies in which you hold financial interests. There will be a matching program to review across different accounts and reporting documents.
This audit will look closely at accounts held in foreign banks subject to reporting under the Report of Foreign Bank and Financial Accounts (FBAR) rules. More than 7,000 people disclosed foreign accounts last year, but in many of these cases the IRS has not yet assessed fines or penalties. If you have yet to disclose an account, you may still be subject to financial penalties and possible criminal charges for tax evasion.
Our Tax Defense Lawyers Will Work To Minimize The Consequences
The lawyers at Kundra & Associates aggressively defend clients in criminal tax cases for fraudulent tax filings and illegal trusts. Contact an international tax law attorney from Kundra & Associates for a consultation by calling 301-637-8130.
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