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As a result of the IRS campaign against cryptocurrency tax noncompliance, it has received more than 1,000 amended tax returns, collected $13 million in taxes from crypto holders with more than $20,000 of transactions, and collected another $12 million from other crypto notices. Moreover, the Treasury Department has recently released the “American Families Plan Tax Compliance Agenda,” which proposes a new financial institution reporting regime. In this reporting regime, all financial institutions, including foreign financial…
The IRS is now using data analytics and article intelligence to access billions of crypto transactions in the digital world and make the process more efficient for IRS Criminal Investigators. Once your cryptocurrency becomes fiat currency and once it goes into an exchange, the IRS is able to trace it. And the IRS is quickly evolving its crypto tracing capabilities. Additionally, the “J5” is a collaborative effort with other foreign taxing authorities (like Canada, the…
One often overlooked taxpayer right is his or her right to their full administrative case file prior to an IRS Appeals hearing. This is a legal requirement and is codified in IRC § 7803(e)(7). However, the taxpayer must affirmatively request the file. And while the Appeals Officer may try and limit access to the information disclosed, taxpayers are well advised to request specific documents related to their file — like, the Revenue Officer’s internal case…
You may submit an Offer in Compromise (OIC) as part of a Collection Due Process hearing at IRS Appeals. One big advantage in doing so is your right to challenge a denial of the OIC in Tax Court; you do not have this right if you submit an OIC through the normal channels. Often times, you also get a more experienced and trained Appeals Officer working your OIC and not just looking for reasons to…
This may be surprising to you but a levy on your Social Security payments does not necessarily stop after the statute of limitations on the collection of tax expires. Yes, collection action after the statute of limitations expires must stop and tax liens must be released. But, as the Eleventh Circuit explains here, the seizure of one’s Social Security benefits is an entire seizure of all benefits, now and in the future, at the source…
The National Taxpayer Advocate (NTA) has identified a serious IRS problem in calculating Collection Statute Expiration Dates or CSEDs. Generally, under IRC § 6502, the IRS has 10 years to collect a liability from the date of assessment. After this 10-year period or statute of limitations has expired, the IRS can no longer try and collect on an IRS balance due; there are exceptions however that “toll” the statute of limitations. That said, it appears…
Those moving to Puerto Rico to avail themselves of the tremendous tax benefits of Puerto Rico Act 22 (now Act 60) are all too familiar with the bona fide residency test. In preparation for an IRS residency audit, they know the three prevailing tests: the Physical Presence Test, the Tax Home Test, and the Closer Connection Test. But state residency audits are also prevalent in domestic moves; that is, state audits where taxpayer move from…
On May 28, 2021, the Treasury Department published its General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals, or “Green Book”, which details the Biden Administration’s tax-related proposals, including those with respect to cryptocurrency. In it, it proposes new information-reporting requirements for tax years beginning after December 31, 2022. They will require domestic and foreign financial institutions, third-party payment settlors, and crypto exchanges and custodians to report taxable gross income inflows and…
If your Non-Profit Charter has been revoked by the IRS, you have several options for reinstatement depending upon how soon you engage the IRS to correct the problem. For non-profit organizations who seek reinstatement within 15 months of revocation, they may participle in retroactive “streamlined” procedures where penalties may not be imposed (for failure to file annual returns). However, if the time period to seek reinstatement exceeds 15 months, the streamlined procedures are not available.…
IRS seeks $32 million for crypto tax enforcement. It seeks $32 million ($3 million on IT specialist compensation, $6 million on hardware and software and $23 million on contractual services) to enhance cryptocurrency-related enforcement efforts. The funding will enable the IRS’s Criminal Investigation Division (CID) to: expand the use of specialized contractor support service provided by a group of cyber/crypto experts; build an internal dashboard for cryptocurrency/blockchain analytics (STRIKES); establish a One-IRS approach to cryptocurrency…