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Wealthy Americans Target of New IRS Initiative

May 7, 2013, Caplin & Drysdale

The IRS's Global High Wealth Industry Group (GHWI Group) is auditing high-net-worth individuals (HNWIs) using techniques developed in large business audits.  This initiative targets U.S. taxpayers with international and/or domestic income or assets in the "tens of millions" and with "complicated" structures.  The audit begins with the taxpayer's Form 1040, but then branches out to the taxpayer's gift tax returns as well as the income tax returns for any partnerships, trusts, or other entities from which income flows to the taxpayer.

While the GHWI Group only conducted 36 audits in its first 2.5 years, the IRS has renewed its efforts in 2013 and now has over 100 taxpayers under examination.  The audits are fast paced and typically include dozens of Information Document Request (IDR) questions.  The work of the GHWI Group demonstrates a level of coordination within the IRS that has not been seen previously.  Caplin & Drysdale's Private Client and Tax Controversies Team  is uniquely well situated to assist taxpayers who are subject to this type of examination, with decades of experience representing individuals on complex tax issues. 

Mark D. Allison
212.379.6060
mallison@capdale.com
Niles A. Elber
202.862.7827
nelber@capdale.com 
Matthew C. Hicks
202.862.7852
mhicks@capdale.com 

Beth S. Kaufman
202.862.5062
bkaufman@capdale.com

Peter A. Lowy
212.379.6050
plowy@capdale.com

Scott D. Michel
202.862.5030
smichel@capdale.com

Michael G. Pfeifer
202.862.5085
mpfeifer@capdale.com
Christopher S. Rizek
202.862.8852
crizek@capdale.com
Charles M. Ruchelman
202.862.7834
cruchelman@capdale.com