IRS to rich tax cheats: Be afraid. Be very afraid.
Internal Revenue Service ramps up efforts to target international tax dodgers worth $30 million or more.
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NEW YORK (CNNMoney.com) -- The Internal Revenue Service detailed plans on Monday to weed out wealthy, international tax cheats with renewed urgency.
IRS Commissioner Douglas Shulman said the agency recently formed the Global High Wealth Industry task force to target investors with assets "in the neighborhood of $30 million."
Shulman, as he addressed members of the American Institute of Certified Public Accountants in Washington, DC., said that a more "holistic" approach was necessary to find international tax cheats, given the growth in Americans investing overseas, and the broad and complicated nature of modern financing.
"Our goal is to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliances of that overall enterprise," he said. "We cannot do this by continuing to approach each tax return in the enterprise as a single and separate entity. We must understand and analyze the complete picture."
Shulman said the IRS has already hired flow-through specialists and international examiners. Over time, he plans to add additional tax agents with expertise on economic trends, valuation issues, and other areas.
As part of an earlier effort to bring U.S.-based international taxpayers into compliance, Shulman said that 7,500 investors recently participated in an offshore amnesty program.
"These taxpayers are now back in the U.S. tax system and will be paying taxes on their offshore income in the years to come," he said, noting that their accounts ranged from about $10,000 to $100 million.
The IRS has become more aggressive, but also more flexible, in tracking down international tax cheats. In August, the IRS struck a deal with the Swiss government, gaining access to thousands of UBS AG (UBS) accounts that Americans might have used to dodge tax payments.
On Tuesday, members of Congress pledged to help with the IRS' efforts.
Max Baucus, D-Mont., chairman of the Senate Finance Committee, Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, and other members of Congress announced Foreign Account Tax Compliance Act, which would force foreign finance companies to reveal information about U.S. account holders.
Baucus said it was based on proposals outlined in the 2010 budget, and President Obama and Treasury Secretary Timothy Geithner both spoke in support of the measure.
"For too long, individuals have taken advantage of the system by hiding money in accounts overseas, while millions of families and small businesses here at home pay the price," Geithner said in a prepared statement. "This legislation will reduce the amount of taxes lost through the illegal use of hidden accounts and is the next step in making sure that everyone pays their fair share."