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

IRS Issues Final Rules for Bonus Depreciation Treatment

The IRS recently issued final regulations and new proposed regulations governing the 100% bonus depreciation deduction under Sec. 168(k). The final regulations finalize proposed regulations issued in August 2018 (REG-104397-18) with some changes in response to comments. REG-106808-19 contains new provisions not addressed previously. Both sets of regulations have been posted to IRS.gov prior to their official publication in the Federal Register. The final regulations adopt the August 2018 proposed regulations with some modifications. They … Read More

IRS Offers Tax Break for Certain Expatriates

The Internal Revenue Service recently announced a break for some “accidental Americans,” giving certain expatriates who have renounced their citizenship a chance to escape the U.S. tax system. The IRS said many people eligible for the relief have lived outside the U.S. for most of their lives and may not have realized that they had U.S. tax obligations. They may have become U.S. citizens by being born in the country or because they had American … Read More

New FinCEN Division Focuses on Foreign Money Laundering

FinCEN Director Kenneth A. Blanco announced that Matthew Stiglitz, a former Principal Deputy Chief in the Department of Justice’s Criminal Division, will lead GID. Mr. Stiglitz brings considerable experience to FinCEN in complex international investigations after spending more than 24 years as a state and Federal prosecutor. “FinCEN will greatly benefit from Matthew’s experience, leadership, and management skills,” said Director Blanco. “We are excited to have him on our team as we stand up GID … Read More

Noncustodial Parent Needs Form 8332 to Claim Child

In a recent court case between Mark Skitzki and the Internal Revenue Service, the United States Tax Court ruled that he was not entitled to claim the dependency exemption deduction, head of household filing status, or child tax credit. He was not allowed to claim these deductions because he did not have Form 8332, which is a Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. Due to a change in custody … Read More

UBS Account Holders and French Tax Authorities

On July 26, 2019, the Swiss Federal Supreme Court rendered a groundbreaking judgment in the field of administrative assistance in tax matters. Reversing a 2018 ruling of the Swiss Federal Administrative Court, the Supreme Court decided that information regarding tens of thousands of UBS account holders presumed to have tax residence in France could be transmitted to the French tax authorities.  The decision was rendered by a panel of five judges, who held public deliberations—a … Read More

IRS Sends Second Letters to Cryptocurrency Holders

Some cryptocurrency investors are receiving a second letter from the Internal Revenue Service telling them that their federal tax returns don’t match the information received from virtual currency exchanges, a new approach in the agency’s increased monitoring of the industry. The letters acknowledge that trading exchanges, not the taxpayers, may have made the errors. The letters are a fresh signal that the IRS is increasing its focus on cryptocurrency tax compliance, after first being slow … Read More