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Just curious, how does the IRS know the total assets of millionaires ? (or anyone, for that matter)

All the documentation that I, or my banks, or brokerages supply to the IRS doesn't contain the numbers they need for that purpose.

I suspect that

1) most businesses depreciate assets, and have to file a tax return....and for a single owner, the 'profits' of the business translate into the income....there is a link.

2) Most millionaires probably have interest and dividend income, as well as cap gains distributions on funds......simple to 'reverse' engineer if you are getting $100,000 in bond interest where you are at.

3) All money that goes into a 401K or IRA, to be tax deferred, is listed year after year on your tax they cummulatively know how much you have squirreled away...waiting for the time they get their taxes.

4) they know how much 'debt' you have since you itemize it, most likely, to take the deduction for interest.

And I suppose anyone who has an income over 1 million a year, they figure has assets of 1 million.....

Dunno exactly..... they have their ways, I'm sure....

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