With tax reform signed into law, many business owners are optimistic about what 2018 will bring. A substantially lower tax rate could mean substantial savings come April 2019. Of course, businesspeople want to pay only as much as they legally owe in taxes; and if they can avoid paying additional taxes, they will.
In the meantime, if you had a wildly successful 2017, should you be concerned about the IRS? If you’re feeling secure and confident, consider this; according to a Bloomberg.com report, uber-successful may draw inquiries from Uncle Sam. The report highlighted that 25 percent of people who had incomes of $10 million and above were audited in 2013. Considering that the IRS collected more than $6 billion in underreported income, it is conceivable that the number of audits for this group could increase next year, even in spite of new tax laws.
For further context, consider this. The IRS’ Global Wealth Industry Group; also known as “the Wealth Squad,” could continue to root out income hidden in offshore accounts. This division is comprised of experienced examination specialists, which include technical advisors to provide industry and issue specific tax expertise in an attempt to identify trends in flow through entities. Such entities are commonly used to mask income attributable to one’s personal tax return.
It is safe to say that “the Wealth Squad” seeks to audit billionaires and large companies; essentially the top half of earners in the top 1 percent of the wealthiest in America.
Even if your business does not fall into this category, it does not mean that you don’t have to worry about what the IRS may be planning next year. If you have questions about addressing tax inquiries, an experienced attorney can advise you.