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|Subject: IRS cracking down on IRAs||Date: 6/23/2012 1:42 PM|
|Author: intercst||Number: 70796 of 75375|
I guess we all need to make sure our paperwork is in order.
Uncle Sam is about to get a lot tougher on individual retirement account mistakes—and that could trip up investors who aren't careful.
The government lets millions of dollars in tax penalties on IRAs go uncollected each year—$286 million in 2006 and 2007 alone for missed withdrawals and contributions that break the rules. The reasons range from bureaucratic hurdles to tax forms that don't provide enough information, according to a report by the Treasury Inspector General for Tax Administration, the federal tax watchdog.
Now the Internal Revenue Service, which has been cracking down on secret foreign accounts and beefing up audits of high earners in recent years, is turning its attention to IRA snafus.
Some 46 million U.S. households, or two out of five, hold a combined $4.9 trillion in IRA assets, according to the Investment Company Institute. The more-aggressive enforcement means those investors need to make sure their accounts are in order—quickly.
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