Helping a High-Net-Worth Individual Deal with the IRS "Wealth Squad"

The IRS "Wealth Squad" is part of the IRS Global High Wealth Industry Group. Its purpose is to increase focus on high-income taxpayers and their related entities, and to strengthen the rigor of its audit processes. Wealth Squad specialists determine selection criteria and draw on resources throughout the IRS, including the Criminal Investigation Division.

The IRS uses mathematical modeling—big data analytics and AI—to determine the examination potential of high-wealth individual taxpayers, assessing the level of compliance risk contained in filed returns. Returns with the highest risk indicators are most likely to be selected for audit.

A high-net-worth individual in the U.S. received an audit notice from the IRS Wealth Squad. Foodman CPAs & Advisors represented the individual and related companies associated with him throughout the Wealth Squad audits. We responded to the squad's voluminous requests for books and records, documentation, bank and brokerage statements, company financial statements, and other records.

Our internal accounting recommendations were implemented, and the Wealth Squad concluded its audit satisfied with all the answers we provided. The IRS has stated that its focus on high-income taxpayers and tax evasion will continue, with increased attention on foreign income and information reporting through FATCA and FBAR compliance monitoring.