Nov. 19 (Bloomberg) — Corporate and private-equity executives can accumulate millions of dollars in tax-favored retirement accounts, taking advantage of gaps in the law and IRS enforcement, the Government Accountability Office said in a report.
The Internal Revenue Service has trouble fighting back because legal disputes over asset values in individual retirement accounts are complex and time-consuming, the report said. Also, the IRS has a three-year deadline for challenging an individual's tax return.
"The result is a revenue loss to the federal government through a circumvention of the longstanding rationale for IRA contribution limits," the report said.
The report expands on data released by the GAO in September. In 2011, about 9,000 taxpayers had IRAs with balances exceeding $5 million each.
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