Disgraced corporate CEOs who pilfered their own companies have done more than just provide good morality stories for the media — they have also awakened a sleeping giant.
In the U.S. Mint — appropriately enough — on the third floor, in this sea of cubicles, the Internal Revenue Service has set up a special tax unit to hunt one animal exclusively: the American corporate fat cat.
"Over the last few years we've seen an increase in the amount of behavior on the part of high-wealth individuals and corporations taking steps — extraordinary steps — to avoid paying taxes," Deborah Nolan, IRS Commissioner of the large and mid-size business division, told CBS News Correspondent Jim Stewart.
But are those corporate big wigs really the ones who cheat the most?
"I believe they have perhaps more opportunity, and in some cases — more desire," Nolan said.
Stung by hearings about their heavy handedness in the late '90s, the IRS virtually got out of the audit business for several years. But now they're back.
Audits of high-income taxpayers — those earning more than $100,000 — topped 195,000 last year, a 40 percent increase.
This year looks bigger. And, more than 3,000 cases were referred for criminal prosecution — a 20 percent jump.
The IRS makes no bones about why they're concentrating on the high rollers. It's because, as bank robber Willie Sutton said — that's where the money is.
Tax consultant Art Auerbach has seen it firsthand.
"Now I'm not here to say the IRS is out to make a profit," Auerbach said. "But the chances of finding things are greater on a large tax return — the tax rate is higher — so therefore the adjustments produce more revenue."
The IRS even has what it calls a "Dirty Dozen" list of things they look for on high income tax returns.
What's the number one thing on high-roller tax returns that catches the IRS' attention right away?
"Transferring stock options to a family partnership over which they still have control with the intent of avoiding or deferring taxes," Nolan said. "We're focusing on that now."
That may be an understatement. In fact, the IRS is sending warning letters to corporate execs trying that dodge that. They basically say "We know who you are, and we know where the money is."
The Dirty Dozen
The IRS urges people to avoid these common schemes:
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