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TAX PRACTICE & PROCEDURES
Updates and guidance on key
IRS practice developments.
Editor: appropriate, personnel from other
Uzell T. Freeman-Williams, CPA Procedure & Administration business operating divisions within the
IRS are brought in to offer assistance
IRS Wealth Squad on a case.
Included in the IRS’s mission state- The Wealth Squad targets both
ment is its role “to help the large high-net-worth nonfilers and high-
The IRS Wealth majority of compliant taxpayers with net-worth filers who have imple-
Squad’s audits the tax law, while ensuring that the mi- mented sophisticated and complex
nority who are unwilling to comply pay
structures or abusive tax transactions.
are increasingly their fair share.” IRS Commissioner Many times, the taxpayers under audit
focused on high- Charles Rettig has made this “fair have foreign financial assets or bank
accounts. For purposes of the Wealth
share” goal one of his top priorities
net-worth nonfilers; and expressed to Congress the need Squad, a typical audit would cover
practitioners can to increase the IRS’s budget so that it business and financial enterprises
take certain steps can actively enforce this measure. In controlled by individuals with assets
or earnings in the tens of millions
fact, in an August 2021 letter to Sen.
to overcome some Elizabeth Warren, D-Mass., Rettig of dollars.
of the challenges noted that for every 1% improvement Origins
in voluntary compliance, annual rev-
wrought by the IRS’s enue could be expected to increase by The Global High Wealth Industry
struggles in providing approximately $30 billion per year. Just Group is not a new program in the
IRS; in fact, it was formed in 2009. The
as staggering, an April 2021 press re-
taxpayer services. lease by Treasury quoted a recent study Internal Revenue Manual (IRM) added
that found that the top 1% of taxpayers Section 4.52.1, Global High Wealth
failed to report 20% of their income Program Processes and Procedures, in
and failed to pay nearly $175 billion in 2013 and updated it in 2019. The IRM
taxes owed annually. explains that this group “was formed
To help tackle this problem, the to take a holistic approach in address-
IRS created what is colloquially known ing the high wealth taxpayer popula-
as the IRS Wealth Squad. Formally tion; to look at the complete financial
called the Global High Wealth Indus- picture of high wealth individuals and
try Group, the Wealth Squad is largely the enterprises they control” (IRM
made up of highly skilled auditors and §4.52.1.1.1(1)). PHOTO BY SEAN GLADWELL/HEMERA/THINKSTOCK
forensic accountants. It is housed in The goal of the program is “[t]o en-
the Large Business and International sure GHW uses its limited resources to
(LB&I) Division of the IRS, more identify and examine high wealth tax-
particularly, under the Pass-Through payers with the highest compliance risk
Entities (PTE) Practice Area. When in a consistent and efficient manner”
34 April 2022 The Tax Adviser
