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‘Hundreds’ hired to hunt offshore tax evaders

A Internal Revenue Service unit set up to catch rich tax cheats hiding their wealth through complex business entities is rapidly taking shape with the hiring of hundreds of employees.
/ Source: Reuters

A new Internal Revenue Service unit set up to catch rich tax cheats hiding their wealth through complex business entities is rapidly taking shape with the hiring of hundreds of employees.

The IRS high wealth unit, part of a broader effort to combat international tax evasion, is focusing on "the entire web of business entities controlled by a high wealth individual," IRS Commissioner Doug Shulman told a tax conference this week.

Another IRS official told Reuters "hundreds" of people have already been hired to staff the new unit, including some from within the agency.

"We have drawn top talent within the IRS that have expertise involving wealthy individuals as well as examination of their related entities," said Mae Lew, an IRS special counsel.

The high-wealth unit is focusing on trusts, real estate investments, privately held companies and other business entities controlled by rich individuals.

While use of sophisticated legal structures can be legal, in other instances they "mask aggressive tax strategies," Shulman said.

Tax authorities in Japan, Germany and the UK have also created similar units.

The IRS is also opening new criminal offices in Beijing, Panama City and Sydney to focus on funds flowing out of Europe and into Asia, in part because of a heightened focus on international enforcement in Europe, Shulman said.

At the center of the agency's offshore effort is its legal cases against Swiss banking giant UBS AG. UBS agreed to turn over nearly 5,000 names of individual American clients and paid $780 million to settle a criminal case for aiding tax evasion.