Be careful how you hold your investment properties; New IRS "high wealth unit"

It was announced last week that the IRS has established a new unit for the purpose of discovering hidden assets and income of wealthy individuals:

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

H/T Reuters

While the announced intention is to focus on international investments and activities, those investors who employ layers of trusts, LLC's and related entities to hold real estate should view the above references ominously.

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

And don't waste time wondering if your activities qualify as "high wealth." If you catch the IRS' attention, you will be considered "high wealth" regardless of what you man own or earn.

Read the Reuters article for more information.