Today was a big day in the IRA world.
First off the Department of Labor came out with their proposal for fiduciary standards. In theory the proposal is supposed to be finalized within 75 days but I’m sure the traditional investment community is going to shift their lobbying efforts in gear and wipe it out.
The other big event was the release of a General Accounting Office report stating the IRS could, bolster enforcement on large IRAs. Special emphasis was placed on, “hard-to-value, nonpublicly traded assets—particularly those under direct control of the IRA owner”. Uhhhh that sounds like self directed IRA owners with LLCs, private loans, and startup stock. A recommendation of the report is to limit the types of investments that can be held by your IRA. That is probably the scariest comment to me. I’m a firm believer that our government has been bought by, and is owned by the financial institutions. Those same financial institutions don’t make money when your IRA buys real estate or makes a hard money loan.
By the way, this doesn’t look to be just a passing fancy. Here’s another out take from the report: “To move forward with a service-wide strategy to target enforcement efforts, IRS must first conduct research to understand how many taxpayers (and the amounts associated with IRA assets) are at risk of noncompliance.” Did you catch that? “[S]ervice wide strategy”.
To give some context, this wasn’t a report solely on IRS issues. Rather it was a government wide overview of 440 actions that the government could take right now to increase revenues and lower expenses. There were only 4 IRS specific issues brought up, audits via the mail, IRAs, partnership and S corp issues. Do you think this is going to get Congress’s attention?
Now is the time to make sure that your IRA is fully compliant.