US authorities eye retirement accounts as possible tax dodges

By Patrick Temple-West

WASHINGTON, Oct 3 (Reuters) - The U.S. Treasury Departmentis examining individual retirement accounts as vehicles forpotential tax avoidance, a top tax official said in a letter toDemocratic lawmakers released on Wednesday.

Democratic lawmakers have raised questions about theindividual retirement account, or IRA, of Republicanpresidential nominee Mitt Romney and asked the agencies to lookinto potential tax skirting by IRA holders. Romney has disclosedthat his IRA contained up to $101 million, despite annual limitsof much smaller amounts.

Treasury and the Internal Revenue Service "have been awareof this risk for a number of years and have been taking actionsto curb abuses," Mark Mazur, Treasury assistant secretary fortax policy, said in the Sept. 19 letter to three DemocraticHouse of Representatives members.

The IRS organized a team last year to improve compliance andenforcement of retirement account tax issues, Mazur said.

The IRA and Treasury are trying to estimate the number ofIRA audits that involve asset valuation issues and gauge thesize of any tax compliance problems, Mazur said.

IRAs are subject to contribution limits, which prompted somespeculation at the time about how Romney's got so large, asshown in financial disclosure forms the former Massachusettsgovernor filed with federal election officials in August 2011.

A Romney campaign spokeswoman did not immediately respond toa request for comment on Wednesday.

"Governor Romney's financial disclosure forms raisedsignificant issues on whether this presents a problem of howpeople possibly misevaluate their IRAs to evade taxes," saidAaron Albright, a spokesman for Democratic Representative GeorgeMiller, who received the Mazur letter.

House Democrats have called on the tax-writing committees inCongress to address IRA tax avoidance concerns.

(Reporting by Patrick Temple-West; Editing by Kim Dixon andPeter Cooney)

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Keywords: USA TAX/IRA