rich tax cheaters OWNED

[Homeslice]

WASHINGTON (Reuters) - A new Internal Revenue Service unit set up to catch rich tax cheats hiding their wealth in complex business entities is rapidly taking shape with the hiring of hundreds of employees.

The IRS high wealth unit, part of a broader effort to combat international tax evasion, is focusing on "the entire web of business entities controlled by a high wealth individual," IRS Commissioner Doug Shulman told a tax conference this week.

Another IRS official told Reuters "hundreds" of people have already been hired to staff the new unit, including some from within the agency.

"We have drawn top talent within the IRS that have expertise involving wealthy individuals as well as examination of their related entities," said Mae Lew, an IRS special counsel.

The high-wealth unit is focusing on trusts, real estate investments, privately held companies and other business entities controlled by rich individuals.

While use of sophisticated legal structures can be legal, in other instances they "mask aggressive tax strategies," Shulman said.

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

The U.S. House of Representatives on Thursday approved a $387 million boost for the IRS for the fiscal year that started October 1, in part to fund the high-wealth unit. The Senate is expected to vote on the measure on Sunday.

NEW GLOBAL FOCUS, JOINT CORPORATE AUDITS

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

The goal is to get those up and running during this fiscal year, which ends September 30, according to Barry Shott, IRS deputy commissioner for international issues for large and midsized business.

At the center of the agency's offshore effort is its legal cases against Swiss banking giant UBS AG. UBS agreed to turn over nearly 5,000 names of individual American clients and paid $780 million to settle a criminal case for aiding tax evasion.

The IRS has also begun initial steps to join forces with other governments to scrutinize corporate tax filings to prevent "tax arbitrage" by companies seeking the best regime.

President Barack Obama has proposed tightening tax rules for U.S. multinationals, including one in which companies delay paying taxes on income earned offshore, a legal practice known as deferral that officials say is abused.

Some tax practitioners expressed worry about such coordination.

"With any new thing, you never want to be the guinea pig," Mary Lou Fahey, general counsel for the Tax Executive Institute, comprised of business executives, said.

Shott said a likely scenario will likely be two countries getting together and decide to examine a narrow issue. In the beginning it will operate like a pilot program where the corporation examined would agree to take part.

"With rare exception ... the taxpayer will absolutely know they are subject to a simultaneous examination," Shott said.

Still, he said there could be cases where the audit needs to be kept quiet, such as when a criminal probe is ongoing.

Initial partners would likely include Canada, the UK and Australia, Shott said.

[z06boy]

CRAP....need to go move some funds around...

Yeah right !!

[Sean]

Not only does it not say anything about illegal activity, but it specifically states that what's happening is legal. Yeah, class warfare is super effective, just ask the Soviets.

[Homeslice]

Originally Posted by Sean

Not only does it not say anything about illegal activity, but it specifically states that what's happening is legal.

It does?

WASHINGTON (Reuters) - A new Internal Revenue Service unit set up to catch rich tax cheats hiding their wealth in complex business entities is rapidly taking shape with the hiring of hundreds of employees.

The IRS high wealth unit, part of a broader effort to combat international tax evasion,

While use of sophisticated legal structures can be legal, in other instances they "mask aggressive tax strategies," Shulman said.

Soemone isn't going to start a sentence saying "while some of it CAN be legal" unless some of the activities AREN'T legal.

[goof2]

Originally Posted by Sean

Not only does it not say anything about illegal activity, but it specifically states that what's happening is legal. Yeah, class warfare is super effective, just ask the Soviets.

This is along the lines of what I am thinking. It plays right in to the "rich people are evil" narrative that is being sold right now. I'm sure some people broke the law, and those cases will generate headlines since the public loves it when rich people get caught and the administration will be pushing the stories. Ultimately the problem will be that the rich generally hire people to tell them what is legal and what isn't. For all the talk there will be about what is "moral" or "right", using loopholes is not illegal. I see this new IRS unit chasing their own tails for a few years before it is quietly shut down.

[Homeslice]

OF COURSE using loopholes and aggressive deductions is legal......unless you fake your reasons for using them. For example, someone who claims to use their vehicle for business purposes but really doesn't is abusing them.

[goof2]

Originally Posted by Homeslice

OF COURSE using loopholes and aggressive deductions is legal......unless you fake your reasons for using them. For example, someone who claims to use their vehicle for business purposes but really doesn't is abusing them.

And if the tax advisors to these rich people were doing their job they would recommend against using loopholes where the rich person must lie to justify its use. I believe this unit will have less success than they anticipate.

[Sean]

Hey look, I can selectively quote too:

WASHINGTON (Reuters) - A new Internal Revenue Service unit set up to catch rich tax cheats hiding their wealth in complex business entities is rapidly taking shape with the hiring of hundreds of employees.

The IRS high wealth unit, part of a broader effort to combat international tax evasion,

Never do they say specifically what they're doing is illegal, or even what crime they're targeting. It's just more "rich people are evil, let's get them" BS. Brilliant, drive them away and YOU can pay their tax bill.

While use of sophisticated legal structures can be legal, in other instances they "mask aggressive tax strategies," Shulman said.

Which ain't illegal.

[goof2]

Originally Posted by Sean

Hey look, I can selectively quote too:



Never do they say specifically what they're doing is illegal, or even what crime they're targeting. It's just more "rich people are evil, let's get them" BS. Brilliant, drive them away and YOU can pay their tax bill.



Which ain't illegal.

That is what the guy is trying to imply, but will not come out and say. This leaves room later for a later statement along the lines of "These people are really pushing the boundaries but are technically doing nothing illegal".

I could see this going another direction as well. The IRS sees lots of behavior they find "immoral", but not illegal. This leads to a big push to make that behavior illegal. The public will eat it up because it will be sold as a bunch of rich people who aren't "paying their fair share".

[Sean]

Originally Posted by goof2

I could see this going another direction as well. The IRS sees lots of behavior they find "immoral", but not illegal. This leads to a big push to make that behavior illegal. The public will eat it up because it will be sold as a bunch of rich people who aren't "paying their fair share".

Yeah, nevermind that the top 1% pays 40% of the taxes.

Percentiles Ranked by AGI


AGI Threshold on Percentiles


Percentage of Federal Personal Income Tax Paid

Top 1%


$410,096


40.42

Top 5%


$160,041


60.63

Top 10%


$113,018


71.22

Top 25%


$66,532


86.59

Top 50%


$32,879


97.11

Bottom 50%


<$32,879


2.89