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Aspen Office
400 East Main Street
Aspen, CO 81611

Carbondale Office
0326 Hwy 133, Suite 200
Carbondale, CO 81623

The IRS is Dropping the Hammer

The days of the "kinder and gentler" IRS may have passed. With a tax gap (the difference between estimates of what tax collections should be and what they actually are) estimated in excess of $300 billion, Congress and the Treasury Dept. are looking to improved collections through enforcement action as a means to raise revenues.

Areas where there has been significant activity (not to mention press) include:

• Investments by US taxpayers made abroad. Treasury is convinced that there is a lot of income being generated from offshore investments that is not being reported on US tax returns. This has been and will continue to be a major focus of the IRS' enforcement division.
• The IRS has created the Global High Wealth Industry group. This experimental unit is tasked with auditing high-net-worth or high-wealth individuals. It is staffed with auditors experienced in large corporate audits as well as complex financial tax and wealth-management structures. IRS commissioner Doug Schulman has stated "Our goal is to better understand the entire economic picture controlled by [wealthy] individuals."
• Examination of retirement plan information returns, with a focus on valuation of illiquid assets such as real estate and limited partnership interests that are held by the plan. These examinations are being conducted in concert with the Department of Labor, the agency responsible for monitoring compliance by qualified plans.

The unfortunate consequence of this situation is that many such enforcement actions will be taken against completely innocent taxpayers - taxpayers who provide all of the information they are aware of to their tax preparer and, thus, file a complete and accurate return. Don't expect the IRS to do things any differently, though - they collect roughly $4 to $5 for every $1 spent on IRS agents.

We are here to help, though – to protect your interests. If you, your friends, or your family have received a notice from the IRS questioning any aspect of the tax return filed for a particular year, please call us immediately. We can help with any questions regarding non-compliance, non-filing, tax notices, tax audits, or any other IRS controversy matters.

Call us, (970) 925-3771, so you have an advocate in your corner.

Reese Henry & Company, Inc.
400 East Main Street Aspen, CO 81611
970.925 3771

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