Aguilar zeroed in on the brochure supplement, which gives investors information about a firm's executives, but little or nothing about an advisor's educational background or disciplinary action. Aguilar said he wants to change that.
"I believe that clients would benefit greatly from the information to be conveyed through the proposed supplement-particularly where the advisory personnel has a disciplinary history," he said.
IRS Sets Sights On The Very Wealthy
Following the trend in other major developed countries, the IRS has created a division dedicated to parsing the finances of very wealthy individuals to make sure they pay their fair share in taxes.
Last autumn, the IRS formed the Global High Wealth Industry within the existing Large and Mid-Size Business Division, its large corporate tax return group. Agents, analysts and managers within this unit--so-called "wealth squads"--are focused on gauging the tax compliance levels of high-net-worth people on all of their income regardless of its source or country of origin.
An IRS spokesman says it's an effort to make it harder for the wealthy to skirt taxes by hiding behind complex Form 1040 schedules; aggressive tax planning; or complicated partnerships, trusts and business investments.
A spotlight has been thrown on the issue with the discoveries of secret bank accounts in foreign countries, particularly the high-profile civil and criminal cases related to UBS clients and Swiss bank accounts.
According to Donald Rocen, a former deputy chief counsel of IRS operations and now a member at the law firm Miller & Chevalier in Washington, D.C., the IRS aims to do more "holistic" scrubbing of high-net-worth individuals' finances to connect the dots between a person's income sources.
Instead of just looking at the Form 1040 by itself, Rocen says, the teams are looking at what kind of entities are flowing into it.
There's no set income level that triggers heightened IRS scrutiny. But a study released last year on high-net-worth tax compliance by the Organisation of Economic Co-operation and Development (OECD) suggested a standard of $30 million.
The IRS says that's a comparable guide for what it is using.
Rocen says it will take time to get the new IRS model fully up and running. But "the likelihood of falling under the IRS' exam focus has been ratcheted up," he says. His advice: High-net-worth individuals should take a more proactive approach with their documentation so they can defend their actions if the agency comes knocking.