The “Wealth Squad” is Watching: Audit Defense for Placer County’s High Net Worth Earners

Placer County – specifically the corridor of Roseville, Rocklin, and Granite Bay – has transformed into one of California’s premier destinations for wealth. Successful business owners, medical professionals, and tech executives have moved here for the quality of life. But as your wealth grows, so does the target on your back.

The IRS has received billions in funding specifically to target high-income earners (those making over $400,000) and complex partnerships. This initiative, often referred to as the “Wealth Squad” (Global High Wealth Industry Group), uses data analytics to link your personal returns with your business entities, trusts, and private foundations. They are looking for the “total financial picture,” and a simple TurboTax defense will not suffice.

What the Wealth Squad Looks For

Unlike standard IRS audits that might look at a single Schedule C, these “holistic” audits examine everything. Common triggers for Placer County residents include:

1. Pass-Through Entity Issues

If you own an S-Corp or huge partnership interests, the IRS is scrutinizing the flow of money between the business and you. Are you using the business to pay for personal expenses? Are you taking loans from the company that are never repaid? These “disguised distributions” are a primary focus.

2. The “Real Estate Professional” Designation

Many high earners in Placer invest in real estate to offset their W-2 or business income. To deduct rental losses against active income, you must qualify as a “Real Estate Professional” (REP). This requires spending 750 hours a year in real estate trades and more time in real estate than your primary job. The IRS audits this status aggressively. If you are a full-time surgeon claiming to be a full-time real estate pro, expect a challenge.

3. Conservation Easements and “Syndicated” Deals

Did your financial advisor put you into a deal that promised a $4 tax deduction for every $1 invested? These syndicated conservation easements are priority #1 for IRS criminal investigations. If you participated in one of these, you need legal counsel immediately to mitigate potential fraud penalties.

Sophisticated Defense for Sophisticated Assets

At Kugelman Law, we provide executive-level tax audit representation. We understand that your time is your most valuable asset. We handle the entire audit process, often without you ever needing to speak to the IRS.

• Forensic Review: We analyze your returns with the same eye as the Wealth Squad before they arrive.
• Legal Privilege: Unlike your CPA, communications with a tax attorney are protected by attorney-client privilege. This is crucial if there are “gray area” transactions that could border on criminal liability.
• Settlement Structuring: If mistakes were made, we know how to structure a settlement that protects your liquidity and your reputation.

Your wealth is the result of years of hard work. Do not let an aggressive audit dismantle it. Contact Kugelman Law, Placer County’s premier tax resolution firm today.