Double Taxation: A Take On All Things Taxes

You Are More Likely to Get Struck By Lightning Than To Get Audited By the Global High Wealth Industry Group

Just when I’d convinced myself that Ryan Howard was the embodient of taking a paycheck while providing no value,  I stumbled upon this report from TRAC, an IRS monitoring and data gathering group based out of Syracuse University,which provides the following:

A year and a half ago, in the fall of 2009, the Internal Revenue Service created a special new unit to examine “high wealth individuals” and the extent to which they were complying with the tax laws.

In an October 2009 speech announcing the new program, IRS Commissioner Douglas Shulman said that the purpose of the Global High Wealth Industry Group (GHWIG) was to “centralize and focus the IRS compliance expertise” on “high wealth individuals and their related entities.”

While the creation of this new group appeared to signal that the IRS was going to launch an aggressive effort to single out high wealth individuals for special attention, very timely agency data shows that so far this has not been the case. In fact, through the end of March 2011…GHWIG has only managed to audit a handful of tax returns in its first 18 months: two (2) in fiscal year 2010 and only eleven (11) during the first six months of FY 2011…

That’s right. Eleven. As a point of reference, in that same time span, the Large Business & International Division — responsible for audits of businesses with assets in excess of $10,000,000 — audited nearly 75,000 returns. While it sounds like the GHWIG has some catching up to do, they’ve got no plans to start burning the midnight oil anytime soon.

While it is likely the IRS is planning to expand its audit goals in the future, at least for now they are very skimpy. In its 12-month target for all of FY 2011, the agency called tor the audit of only 122 returns.