Tuesday, September 01, 2009

IRS Corporate Audit Division Will Examine UBS Tax Evasion Cases

When the average taxpayer gets audited by the IRS, they usually get contacted by a regular IRS revenue office. However, this is not the case for those who are being audited as a result of the recent UBS settlement. According to Bloomberg.com, the IRS has created a new division for auditing wealthy Americans suspected of evading taxes offshore as part of an effort to get every dollar they are owed.

The tax agency posted internal job listings yesterday seeking auditors to work for a newly created office within its Large and Mid-Size Business division that will be tasked with monitoring what it called the “global high-wealth industry.”

The move centralizes responsibility for auditing wealthy individuals suspected of offshore tax evasion in a unit with the most experience navigating international tax treaties and untangling complex cross-border business structures.

“That’s where the most sophistication is at IRS,” said Michael Murphy, a former deputy IRS commissioner who is now a consultant for the law firm Sutherland Asbill & Brennan LLP in Washington.

Responsibility for auditing wealthy individuals is currently split among IRS divisions devoted to small businesses and self-employed wage earners and investors, which don’t have as much experience in cross-border transactions, Murphy said.

The IRS says it anticipates handling up to 10,000 new cases related to UBS, including thousands of people who come forward voluntarily in exchange for reduced penalties before Sept. 23.

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