2019 Draft IRS Tax Form Asks About Cryptocurrency

The IRS is specifically asking taxpayers about their virtual currency transactions in the latest draft of a form forreporting certain types of income. “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” This is the question the IRS asks on the latest draft of the 2019 Form 1040 Schedule 1 released Oct. 11. Taxpayers don’t need to file Schedule 1 if their answer … Read More

IRS Warns of New Property Lien Scam

The IRS has advised about scams involving those involving fake property liens, which threaten the recipient with a tax bill from a fictional government agency, stating signs of such scams and what to do if suspecting one. A scam lien or levy letter entails bogus overdue taxes owed to a non-existent agency that might have a legitimate-sounding name such as “Bureau of Tax Enforcement” and may reference the IRS. Here are some details about the … Read More

Crytpocurrency Hard Fork Explained

The IRS recently came out with Rev. Rul. 2019-24, which helps explain the following questions: Does a taxpayer have gross income under § 61 of the Internal Revenue Code (Code) as a result of a hard fork of a cryptocurrency the taxpayer owns if the taxpayer does not receive units of a new cryptocurrency? Does a taxpayer have gross income under § 61 as a result of an airdrop of a new cryptocurrency following a … Read More

US Expats with Tax Debt and Revoked Passports

The IRS began sending letters to indebted taxypayers in July, stating they will be asking the U.S. State Department to revoke their passports. People who live abroad and receive the letter have 90 days to call the government and set up a payment plan, the IRS said in an email. For domestic taxpayers a response is required in 30 days. A valid passport is often a requirement for acquiring a work visa, obtaining a mortgage, … Read More

Cryptocurrency tax guide

The IRS announced a Virtual Currency Compliance campaign to address tax noncompliance related to the use of virtual currency through outreach and examinations of taxpayers. The IRS will remain actively engaged in addressing non-compliance related to virtual currency transactions through a variety of efforts, ranging from taxpayer education to audits to criminal investigations. The Internal Revenue Service began sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the … Read More

Investing Overseas – Known and Unknown Problems

U.S. citizens and residents investing overseas need to be aware of the risks and complications they face when investing overseas.  Not only are there complicated tax issues, but foreign regulations regarding investment protection are not as strong as they are in the United States.  In fact, in many countries, investment protection safeguards don’t even exist! Additionally, foreign inheritance laws are difficult to navigate which makes estate planning and wealth transfer hard to accomplish.  Foreign investments … Read More

Lawsuit States Repatriation Tax is Unconstitutional

A Washington state couple sued the government arguing a tax on repatriated assets, created in the 2017 tax  law, violates the U.S. Constitution.  The 2017 tax law imposed a one-time tax on earnings held offshore in cash and other assets offshore since 1986—15.5% on cash and 8% on non-cash or illiquid assets. Before the change, assets could be held offshore without incurring tax. The tax violates two provisions of the Constitution, Charles and Kathleen Moore … Read More

Crypto Holders May Hear from IRS Even if They Don’t Owe Tax

Some cryptocurrency investors have started to receive notices from the Internal Revenue Service because what they reported on their tax returns doesn’t match information the agency is getting from third parties, such as exchanges. The mismatch notices—called CP2000 notices—inform taxpayers that discrepancies have been detected and ask them to justify the positions they took on their returns.  For cryptocurrency investors, the mismatches often occur because a handful of virtual currency exchanges are providing information to … Read More