Making a Federal Case?

Mar 3, 2011 10:00 AM, BY KEVIN JOHNSON

On Oct. 26, 2009, Internal Revenue Service Commissioner Douglas Shulman, speaking at the annual meeting of the American Institute of Certified Public Accountants (AICPA), announced the IRS' creation of a new audit unit, the Global High Wealth Unit

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On Oct. 26, 2009, Internal Revenue Service Commissioner Douglas Shulman, speaking at the annual meeting of the American Institute of Certified Public Accountants (AICPA), announced the IRS' creation of a new audit unit, the Global High Wealth Unit (GHWU).¹ Comm. Shulman stated that the GHWU's purpose was to audit very wealthy individuals who hold an interest in investments and businesses through complex domestic and international structures, including corporations, trusts, partnerships and other flow-through entities.² The key question now is whether the IRS is hoping to develop federal fraud cases from this audit unit.

Based on the activities that the IRS suspects may be occurring¸ it's apparent that the IRS believes that some of the planning for extremely wealthy individuals, including the use of international structures, may have crossed the line between aggressive tax planning and tax fraud.

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