Some cryptocurrency traders have made figurative killings with their investments. The world of cryptocurrency investment and speculation indeed has an otherworldly sense to it, both because of the unique nature of cryptocurrency and its roller-coaster rides for investors. Tax law, though, doesn'...
Although the IRS provided cryptocurrency guidance recently in when it issued Revenue 2019-24, there are still many questions that remain unanswered by IRS guidance. Among the questions unanswered include how one should report cryptocurrency that is lost or stolen. Generally, there are three potential reporting options by individuals, and because of the 2017 tax act, classifying these losses as an abandonment loss is likely to result in the most favorable taxpayer treatment.
The IRS announced today that it plans to begin auditing several thousand more taxpayers that have operated section 831(b) or micro-captive insurance companies in the coming months. The IRS has been aggressively pursing taxpayers operating section 831(b) captives for several years, and it has been...
After nearly five years, the IRS has finally broken its silence on cryptocurrency by issuing Revenue Ruling 2019-24, which provides some clarification regarding the tax treatment of cryptocurrency. This article summarizes what the IRS has told us and notes those items that still have not been addressed by the IRS. If you are involved in cryptocurrency investments, purchases, sales, or mining operations, these details are important because, as previously discussed, the IRS and United States Treasury Department are auditing taxpayers whom they believe to be involved in cryptocurrency, and the IRS has frequently warned that it intends to pursue criminal prosecution of those taxpayers that do not accurately disclose their cryptocurrency transactions.
Can I receive Employment Tax Benefits and Improve my Employees' Health? If you find yourself searching for a plan that encourages your employees to hit the gym instead of eating cake in the break room, you may stumble across some health plans that encourage employees to get healthy and saves you...
The IRS now has information regarding U.S. individuals who have cryptocurrency and are sending out automated letters to these individuals. The letter from the IRS is numbered Letter 6174-A, and it states, “We have information that you have or had one or more accounts containing virtual currency but may not have properly reported your transaction involving virtual currency, which include cryptocurrency and non-crypto virtual currencies.” In summary, if you invested in a cryptocurrency, or have a mining operation, you should be on the lookout for correspondence from the IRS regarding your involvement and make sure that you have properly reported all your income from virtual currency sources, including information returns (W-2s, 1099s).
Taxing Issues for Divorcing Parents: Dependent Exemptions, Head of Household Filing Status, Dependent Care Credit, Child Tax Credit, and Higher Education Tax Credits
The Tax Cuts and Jobs Act of 2018 made significant changes to the Tax Code, including child-related tax issues. If you are going through a divorce, be sure that your family law attorney is aware of Dependent Exemptions, Head of Household, Dependent Care Credit, Child Tax Credit, and Higher Education Tax Credits to ensure that you are properly represented during divorce. Merely addressing these issues in a divorce decree is not enough because rarely does the Tax Code respect the provisions of the divorce decree. Instead, you must ensure that you have taken the necessary steps to meet the requirements in the Tax Code.
IRS announces that it will waive penalties for many whose tax withholding and estimated tax payments fell short in 2018
The IRS announced today, during the government shutdown, that it will waive the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.
Does your business have unpaid employment tax liabilities? If you answered yes, it is important to consider designating voluntary payments towards trust fund taxes. Designating payments costs you nothing, and helps you avoid personal liability. If you do not designate your payments, the IRS will apply the payments in a manner that is least beneficial to you.
You’ve recently discovered an error on your income tax return. Do you have a duty to notify the IRS? Generally, no, you have no legal obligation file an amended income tax return, but in some circumstances, it may be beneficial to file an amended income tax return. However, taxpayers should carefully consider whether to file an amended income tax return, and if they decide to file one, they should time the filing carefully.
In March 2018, the IRS announced that it would end its Offshore Voluntary Disclosure Program (OVDP) on September 28, 2018. Now that the program is over, what options are available to taxpayers with criminal exposure that seek to resolve past failures to report?
The IRS announced today that it will completely end the Offshore Voluntary Disclosure Program (OVDP) as of September 28, 2018.
What are your options if you did not report a foreign bank account or other foreign financial asset?
If you have a foreign bank account or other foreign financial asset, you may have a reporting obligation. Failure to report when required may result in significant penalties. The draconian penalties may be as much as 50% of the value of the assets at the time that the report was due. Do you have...
If you find yourself in litigation with the IRS, or in the middle of an administrative dispute that seems to be going nowhere, it’s time to consider a taxpayer’s best friend: the qualified offer. The qualified offer provisions allow taxpayers to recover fees and costs when the IRS rejects a settlement offer, and the taxpayers win a determination that requires a lesser amount than the offer.
Our tax system is based on voluntary reporting, and the Tax Code is full of different penalty provisions to encourage accurate voluntary reporting by penalizing those that do not. Even if all you did was fail to timely file your return and timely pay the amount shown on your return, you could be facing penalties of as much as 45% of the tax that you owe. But don’t despair; there are several ways to alleviate penalties. This article will focus on the three most common penalties: failure to file, failure to pay, and accuracy-related penalties.
The Tax Cuts and Jobs Act is the first significant tax reform effort by Congress in more than 30 years, and it repeals the deduction for alimony and separate maintenance payments starting in 2019. Learn about the new changes and account during 2018.
Offshore Criminal Tax Sentences Likely to Increase Under Change Announced by the Department of Justice
The Department of Justice recently announced that it will begin arguing that offshore tax defendants should be sentenced under different guidelines that are based on the balances of offshore accounts rather than the tax loss from failing to report income from those accounts.
The IRS has a new Chief in charge of its Criminal Investigations division, and that means a renewed focus on traditional tax crimes (overstating deductions, underreporting income), and a new data-drive approach that will mean more tax crime investigations in Phoenix, and the surrounding cities.
This article will help you understand when the federal tax lien arises, what effect the filing of a Notice of Federal Tax Lien has, and how you can get rid of the Notice of Federal Tax Lien.
IRS Passport Certifications: If you owe more than $50,000, the IRS now has the power to certify you for passport revocation!
If you owe more than $50,000 in tax liabilities, the IRS now has the power to certify you to the State Department for passport revocation, and it is starting soon! This article addresses this new power of the IRS, the criteria to be certified, the right to judicial review of the IRS certification, and how you can avoid being certified, and thus, prevent the State Department from revoking your passport.
The IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. What should you do now?
The IRS sent you a letter titled Final Notice of Intent to Levy and Notice of Your Right to a Hearing (LT11 or Letter 1058). What should you do now? This article will help you understand the importance of this notice, assess whether the IRS followed the proper procedures, and explain what you can do.
If you are involved in a tax controversy with the IRS, you should expect that that the IRS will want your electronically stored information (ESI) and it will summons it. This article explains what ESI is, why it matters, what powers the IRS has to get it from you, and what you should do about it.