The IRS has recently issued an ominous notice (#IR-2023-126) in which the IRS warns high income US taxpayers and millionaire non-filers that the IRS is targeting them to conduct audits, identify and collect undeclared income and unpaid taxes while considering criminal tax evasion charges in many cases.
The IRS discusses the reduction in funding they have been forced to endure over the past ten years and the impact this has had on their technology, systems and efforts to pursue and collect taxes here in the US and around the world. Recent budget increases have allowed the agency to “modernize decades-old technology” that will assist in monitoring the activities of US taxpayers worldwide, while simultaneously improving the customer experience of those who contact the agency for help and providing additional protections for the private information of US taxpayers.
The agency has been focused upon new strategies to allow the IRS to closely monitor the US and offshore accounts, assets, transactions and even purchases of US taxpayers. The IRS warns high income US taxpayers and millionaire non-filers that the days of hiding assets, money and even luxurious transactions offshore are coming to a rapid end.
Counter measures have been developed to offset the “complicated set of tools” which high income and millionaire taxpayers have used to secret money and assets and hide luxurious purchases, especially overseas. The IRS has implemented these strategies and provides warning in the notice that the agency is “taking swift and aggressive action to close this gap.”
The IRS’ Criminal Investigation Unit has developed a strong track record of recent victories against high income and millionaire taxpayers resulting in substantial 7 to 8 figure restitutions as well as criminal prison sentences for tax evasion, money laundering and filing false IRS tax returns.
For example, an investigation of activities in Puerto Rico uncovered a scheme resulting in more than 100 cases of high income US taxpayers hiding taxable income from the IRS through the claiming of various “benefits” without meeting the requirements established to qualify for those benefits (if the taxpayer received those benefits at all). Attempts by US taxpayers to hide offshore income through foreign pensions and personal retirement accounts have become targeted “schemes” by the IRS, resulting in substantial fines and exposure to criminal prosecution. In one case, the restitution amount owed to the IRS exceeded $6 Million.
The IRS Publication IR-2023-126 provides substantial insight into the activities of onshore and offshore US taxpayers who are “millionaires” that are not filing tax returns at all. These cases often involve substantial luxurious purchases including cars such as a Maserati or Bentley, real estate, jewelry and other expensive acquisitions.
We invite you to read IR-2023-126 in which the IRS warns high income US taxpayers and millionaire non-filers of new technology and strategies as well as strategic cooperative partnerships with foreign sovereign tax agencies which will be used to identify, target and pursue those who attempt to evade US taxes, hide income or simply fail to file a US tax return.
US citizens are taxed on income worldwide. If you are a US citizen, expatriate or taxpayer with offshore bank accounts, real estate holdings, business(es), investments, retirement accounts or pensions the IRS has invested millions to update technology and develop new tactics to identify unreported income, assets, accounts and purchases here in the United States and around the world.
It is prudent to use tools such as transactional planning, domestic and international tax planning and other legal strategies to not only protect assets worldwide but to reduce the impact of taxation upon retained earnings and income. While it is the responsibility of every US taxpayer to file a tax return with the IRS, report income and other relevant financial activities and pay the appropriate taxes on business and personal income here in the US and around the world, it is also legal, moral and ethical to structure your affairs in a such a way as to reduce your taxable exposures.
We invite you to learn more about the integrated legal, tax and accounting services of Allen Barron, the sound advice, counsel and services we provide to high income taxpayers, business owners (foreign and domestic), investors and expatriates and contact Allen Barron or call today to schedule a free and substantial consultation at 866-631-3470.
