IRS Audits for Wealthy on the Rise
In 2009, the IRS increased its audits of Taxpayers with $1 million income (and over):
1. $1M - $5M Up 45%
2008: 12,746
2009: 18,585
2. $5M - $10M Up 17%
2008: 1,784
2009: 2,090
3. $10M (or more) Up 9%
2008: 1,347
2009: 1,473
In 2009, the IRS created a new “Global High Wealth Industry Group” to examine tax-avoidance vehicles (e.g., sophisticated financial, business & investment vehicles for tax avoidance).
Under the 3/25/10 Healthcare and Education Reconciliation Act of 2010 (HR 4872) a new “investor tax”: “3.8% Medicare tax” on investment income: the lesser of:
1. Net Investment Income for the Tax Year.
2. Excess over $200,000, individual’s modified adjusted gross income.
In 2010, $1M + Earners Tax Risks:
1. 2010 (Forward) Increased Risk of Tax Audits.
2. Increased Taxes (3.8% Medicare Tax for these Investors with over $200,000 in adjusted gross income.
Please see: 4/4/10 Article from Investment News
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