High-Net-Worth Taxpayers, Passthrough Entities and Corporations
Wilson Tax Law is comprised of former IRS attorneys who specialize in high-dollar compliance issues, including IRS and state tax audits, appeals and litigation, involving complex partnership structures, ESOPs, Estates, Trusts, Captive Insurance, large corporations, real estate professionals, and other high-income individuals. Clients faced with high-dollar compliance issues should obtain well-qualified tax professionals who have specialized training and experience to represent them before the IRS and/or state tax authorities because the playing field is complex and the stakes are high.
IRS Wealth Squad
The tax authorities deploy specialized auditors during high-dollar compliance audits. The IRS has created what is colloquially known as the “IRS Wealth Squad.” Formally called the “Global High Wealth Industry Group”, the Wealth Squad is largely made up of highly skilled auditors and forensic accountants. It is housed in the Large Business and International (LB&I) Division of the IRS, more particularly, under the Pass-Through Entities (PTE) Practice Area. When appropriate, personnel from other business operating divisions within the IRS are brought in to offer assistance on a case.
The Wealth Squad targets both high-net-worth non-filers and high-net-worth filers who have implemented sophisticated and complex structures or perceived abusive tax transactions. Clients involved in these types of audits may have foreign financial assets or bank accounts and/or have complex domestic legal structures. For purposes of the Wealth Squad, a typical audit would cover business and financial enterprises controlled by individuals with assets or earnings in the millions of dollars. Unlike a standard examination/audit of a single type of tax form that practitioners are accustomed to dealing with, an exam conducted by the Wealth Squad or High-dollar Group auditors generally includes an individual tax return (called the “key case”), coupled with related income tax returns in which the client has a controlling interest and for which significant compliance risk is deemed to exist, such as interests in partnerships, trusts, S corporations, C corporations, other foreign entities, relationships with private foundations, large gifts, etc.
To maximize revenue collection, the IRS has made high-net-worth compliance audits a top priority. In 2023, the IRS announced a strategic operating plan to spend nearly $80 billion in funds that it was allocated through the Inflation Reduction Act. The primary goal of the IRS’ $80 billion plan is to address “high-dollar compliance issues,” including those related to complex partnership structures, large corporations, and high-income individuals. The IRS is expanding its efforts to recruit and retain experienced, sophisticated, and specialized examiners to conduct the examinations. Technology, including the use of data analytics and risk assessments, is another important area in which efforts are being focused.
Tax Representation
When it comes to high-dollar compliance audits, Wilson Tax Law leverages its more than 50 years of combined legal experience and its knowledge of complex tax issues and procedures, acquired as former IRS trial attorneys and defending clients in private practice, to level the playing for its clients. During these types of high profile examinations, the attorneys at Wilson Tax Law work closely with our clients to strategize and review all relevant information, analyze complex legal issues, professionally engage with the IRS auditors, and timely respond to IRS inquiries. While settlement is always the goal, our tax defense lawyers are prepared to litigate unresolved issues when necessary.