In a move that may or may not be related to the unusually large and complicated IRA held by presidential candidate Mitt Romney, the Treasury Department has launched an investigation of individual retirement accounts as a possible vehicle for tax evasion.
Reuters reports that a top IRS official sent a letter to Democratic leaders on Wednesday explaining that a probe has begun into the misuse of the IRA for tax-avoidance purposes.
Not coincidentally, there has been an increased focus in recent months on the massive IRA account held by Romney, who has admitted his own might hold as much as $101 million.
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The IRS has organized a team to improve oversight and investigation of large-asset IRAs and to take a look at the tax compliance issues associated with potential offenders.
Mark Mazur, Treasury's assistant secretary for tax policy, said Treasury and the IRS have been aware of the risk of abuse of the IRA's tax-deferment benefits.
Romney's staff insist that his IRA, while much larger than most, has been handled professionally and that the investments made during his time at Bain Capital have gained value tremendously. His holdings were clarified, to some degree, with the filing of his financial disclosure forms.
A spokesman for Democratic Representative George Miller, who was contacted by Mazur about the Treasury investigation, said the issue still bears investigating, not just in the candidate's case.
"Governor Romney's financial disclosure forms raised significant issues on whether this presents a problem of how people possibly misevaluate their IRAs to avoid taxes," he said.
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