Senate Finance Committee Chairman Ron Wyden, D-Ore., has urged the IRS and the Treasury Department to crack down on "mega IRAs" after a Government Accountability Office report found holders of large IRAs are using alternative investment strategies such as excess contributions and undervalued assets as tax dodges.
The GAO report, released this week, noted that for tax year 2011, roughly 600,000 taxpayers had IRA accounts worth more than $1 million – and about 9,000 taxpayers had IRAs worth more than $5 million. "Those figures stand in stark contrast to most Americans, who had a median IRA account balance of about $21,000," Wyden told IRS Commissioner John Koskinen and Treasury Secretary Jacob Lew in a letter.
According to the GAO report, a "small number of taxpayers has accumulated larger IRA balances, likely by investing in assets unavailable to most investors — initially valued very low and offering disproportionately high potential investment returns if successful."
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
