In 2009, the IRS formed the Global High Wealth Industry Group (aka “The Wealth Squad”) to crackdown on America’s wealthiest tax evaders. IRS tax attorneys say the group is made up of agents specially-trained to ferret out even the most skilled deadbeats. These tax lawyers also say the elite group of specially-trained agents targets Americans reporting $5 million or more in income.
Tax attorneys point out, however, that since its formation the IRS has been extremely closed-lipped about The Wealth Squad’s performance, and even refuses to comment on what, if anything The Wealth Squad has collected in back taxes. What we do know is that while the IRS has been ramping up audits on the wealthy, The Wealth Squad has been criticized by a recent study from Syracuse University for not conducting enough audits. Specifically, the study reported claims that 78 agents in the squad only audited two (2) returns in 2010 and eleven (11) returns in the first six months of fiscal 2011. Tax lawyers observe this was far below the agency’s targets.
The IRS has disputed the study’s results and claims the numbers are incorrect, but it has failed to offer any alternative information to counter the study’s criticisms. IRS tax attorneys and other agency observers say they understand the IRS’s need to keep some information confidential, but to say nothing about the newly formed group’s effectiveness seems odd, particularly in light of the critical study report.
Interestingly, Brittan set up a similar type of wealth squad generally around the same time our IRS created its version of the group. Unlike the IRS, however, tax lawyers say the British have publically disclosed their group’s results. Specifically, the British group reportedly recovered £162 million of back taxes (the equivalent of $263-million U.S. dollars) in 2010-11. That was up from the year earlier in which the group reportedly recovered £82 in back taxes. These results were in addition to any taxes which may have already been paid by the wealthy violators targeted by the group.
The Brit’s decision to publish their group’s results makes the IRS’s refusal even more suspect. There are some tax lawyers who confidentially suspect the agency may be trying to cover-up its’ Wealth Squad’s poor performance. While this may only be speculation, it begs the question: Why not tell American taxpayers whether their money, which was used to pay for the highly specialized squad, has given them a good return on investment?
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