Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call:
212-302-9400 or toll-free at 844-653-2873.

Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call: 212-302-9400 or toll-free at 844-653-2873.

Serving Individual And Corporate Tax Clients Nationwide From Our New York, New Jersey, Florida And California Offices

Steven Goldburd and Benjamin A Goldburd

Since 1983, our tax firm has skillfully represented individuals and corporations across the United States and around the globe from our offices in New York, New Jersey, California and Florida.

Will the IRS target millionaires in 2023?

On Behalf of | Sep 19, 2023 | Tax Audits

The Internal Revenue Service (IRS) plans to use funding from the Inflation Reduction Act to focus on millionaire and billionaire taxpayers in the United States. Critics point to the historically low rate of audits for those in these tax brackets as proof that an alleged increase may not translate to much. IRS officials have claimed that the rate is low because such audits take more resources compared to the more typical taxpayer audits. New funding, they argue, has provided these resources.

This argument supports the IRS’ claims to increase audits of millionaires in 2023.

What will the IRS look for?

Specific loopholes that the IRS is likely to review include broad generalizations like those with offshore accounts or those who claim no income but make luxury purchases like Bentleys as well as more specific examples like those who claim residency in Puerto Rico or claim exemptions based on treaty rules with Malta.

Will it work?

We know the IRS is keen on the idea of targeting millionaires, but will they follow through and have successful audits? A ProPublica article dove into this question. The researchers focused on a similar stance taken by the IRS more than a decade ago. In the early 2000s, the IRS announced it would focus its efforts on the ultra-wealthy. The attempt did not go well. The ProPublica piece used the case of ultra-wealthy auto industry magnate Georg Schaeffler as an example. The IRS investigated Mr. Schaeffler for various tax crimes. They accused him of attempting to hide over $5 billion in income. The IRS stated he owed over $1 billion in tax obligations and penalties. After more than seven years of negotiations the IRS backed down and, instead of pursuing the original bill decided to accept tens of millions and settle the rest.

So, did it work? Well, kind of. The IRS was able to get tens of millions in payment. However, critics point out this was only a small portion of what Mr. Schaeffler actually owed the IRS.

What if I am the subject of an IRS audit?

If the IRS decides you are one of the millionaires it would like to audit, it is important to take the matter seriously. The example above was settled after years of negotiations and legal battles. The attorneys at Goldburd McCone are experienced with these types of cases and can review your situation and provide guidance to help better ensure your interests are protected.