Super Audits for the Super Wealthy

If it isn't clear by now, the Obama administration has a message for the wealthiest U.S. taxpayers. It isn't playing around. The days of lowering tax bills at will by sticking assets in offshore banks and arcane financial structures are pretty much over. The initiative started in recent months with a very public crackdown on a select number of clients at UBS, the Swiss bank. That maneuver was intended to scare the daylights out of thousands of other potential targets, fleshing them out into the open with an amnesty program. The carrot: We will seize half of your questionable assets, but we won't throw you in jail.

Now comes word that the administration has created a special task force to focus on tax compliance among the super wealthy. The Wall Street Journal reported on Tuesday that IRS Commissioner Doug Shulman has launched a Global High Wealth Industry group, focusing on audits of individuals with assets or income in the tens of millions of dollars. An IRS official said the group would begin work on these initial audits in the next month, according to the Journal.

"You cannot assess compliance among the nation's wealthiest individuals by looking only at their 1040s [tax returns]," Mr. Shulman said, according to the Journal. "Our goal is to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliance of that overall enterprise."

The Robin Hood initiative ought to play well politically, and it certainly will help close the gargantuan budget deficit that poses a huge threat to the long-term fiscal health of the country. It also may create some cover if it becomes necessary to squeeze more tax revenue out of the greater population.