Photo by Alesia Kozik The 2024 election features a lot of firsts. We’ve seen the first sitting president to withdraw from the race after securing enough delegates to win his party’s nomination. The first woman of color seeking the presidency. The first person convicted of (and facing more) felony charges running against her. It’s also the first presidential race in which crypto currency could play a major role. Blockchain companies have supplied 48 percent of the $248 million of corporate money donated to influence federal elections this cycle, according to research by the nonprofit watchdog group Public Citizen. To be... Read more →
Crypto Digital Currency Assets
Photo by Alesia Kozik In the last 15 years, virtual currency has grown into a trillion-dollar industry. It’s exponential growth is reflected in the number of types of virtual currency. Since April 2020, the crypto options have jumped from 5,000 to more than 26,000 by July 2023. The Internal Revenue Service has faced digital currency tax compliance complications from the get-go. The challenges have increased as the sector and its advocates have grown. Evasive crypto transactions and how effectively the IRS deals with the taxpayers who employ them is the subject of a recent Treasury Inspector General for Tax Administration... Read more →
Almost a year ago, the man dubbed Bitcoin Jesus because he made a fortune as an early advocate of the digital currency, was indicted on mail fraud, tax evasion, and filing false tax return charges. We found out about the $48 million tax evasion and other charges this week when the Department of Justice (DoJ) unsealed the June 2023 indictment naming Roger Keith Ver. He was arrested in Spain based on the criminal charges, and U.S. law enforcement officials are seeking Ver’s extradition. The indictment, announced by DoJ on April 30, alleges that Ver formerly of Santa Clara, California, owned... Read more →
UPDATE, June 28, 2024: Today, the Internal Revenue Service and Treasury Department issued final regulations and other guidance related to reporting digital assets. Beginning with the 2025 calendar year, brokers may be required to report certain information regarding digital asset transactions as outlined in the new regulations set forth by the IRS. This includes filing information returns, providing statements to payees, and withholding on certain digital asset transactions. You can find more in the IRS announcement, and this Marcum analysis. Just days after tax season 2024 wrapped on April 16 for most filers, the Internal Revenue Service already alerted some... Read more →
Today's post on the second half of the 2024 Internal Revenue Service's Dirty Dozen tax scams looks at a wide range of schemes and potential victims. Tax pros are targets, as are high income earners in schemes 7 through 12. Together with the Dirty Dozen's first six scams posted last week, there's a scam for almost all of us taxpayers. Take notice and don't become a Dirty Dozen victim. Last Friday, I shared the first six of the Internal Revenue Service's annual Dirty Dozen list. As promised, this post wraps up schemes, cons, and scams 7 through 12. This compilation... Read more →
Doing your taxes can be stressful, but don't add to it by making an avoidable filing error. (Photo by Unsplash+ in collaboration with Getty Images) The tax filing, and paying if you owe, deadline is nearly here. Millions of us have yet to send our 1040 forms to the Internal Revenue Service. So next week is likely to be frantic, especially on the part of taxpayers who are doing their own taxes. This also means that these last-minute filers might make some mistakes as they hurry to get their taxes done by April 15. Don't be one of them. Tax... Read more →
The Internal Revenue Service has made it clear for years. It wants to know about your digital assets. Ignore the crypto question, now at the top of more tax forms, at your own tax peril. And if you go further and don't report taxable digital transactions, the Department of Justice (DoJ) will get involved. That's the case for a Texas man, who this week was indicted on charges of filing false tax returns and structuring cash deposits to avoid currency transaction reporting requirements. Bitcoin was a component in both charges. Notably, the federal prosecution involving digital transactions is historic, at... Read more →
Photo by Art Rachen on Unsplash IRS offers guidance on how to answer the tax return digital asset question On Jan. 11, the first day of trading after the Securities and Exchange Commission approved exchange-traded funds (ETFs) tied to bitcoin, companies offering such products saw $4.6 billion in transactions. The investors who were first to board the bitcoin ETF train will have to deal with the associated tax route next filing season. This year, however, the Internal Revenue Service is reminding taxpayers that, in most cases, they need to report their cryptocurrency transactions and, where applicable, pay any income tax... Read more →
Even if you're not a cat, you can appreciate Boxing Day as a way to help others by making charitable donations. Happy Boxing Day! This holiday isn't formally celebrated in the United States, but many people around the world embrace the day after Christmas as a way to keep the season of giving going a bit longer. There are many explanations as to how Boxing Day, and its name, came to be. One commonly accepted origin story is that when it began in the United Kingdom during the Victorian period, household servants were given the day after Christmas off as... Read more →
Photo by Grant Durr on Unsplash 🌟 Billions of dollars in fraud. 🌟 Victims across the globe. 🌟 🌟 Criminals who are all about personal gain. 🌟 No, that's not the opening voiceover in a trailer for a new Netflix true crime series, although I'd watch it if it were. It's from IRS Criminal Investigation Chief Jim Lee's comments on his unit's top 10 cases of 2023. Those three opening elements, said Lee, are the crux of CI's biggest busts last year. "When I say our team at CI is the best at following the money trail, I mean it,"... Read more →
Special agents with the Internal Revenue Service Criminal Investigation have an impressive conviction rate on their case. (Photo by Unsplash+ in collaboration with Getty Images) Fiscal 2023 was a good year for the Internal Revenue Service Criminal Investigation division. The law enforcement unit initiated more than 2,676 criminal investigations, identified $37.1 billion from tax and financial crimes, and obtained an 88.4 percent conviction rate on prosecuted cases. Those figures were part of IRS CI's Fiscal Year 23 Annual Report released this week. They were attained by following the money, which is a key technique of the only federal law enforcement... Read more →
People are increasingly falling for a new scam known as pig butchering. The scheme involves cryptocurrency purchases, and the promised outcome is as reliable as flying pigs. (Photo by Daniel Novykov on Unsplash) The Internal Revenue Service Criminal Investigation (CI) unit has some advice as the holiday season nears. Don't be a pig. No, the warning has nothing to do with over-eating, starting with next week's Thanksgiving spreads. Rather, IRS CI says crooks are reaching out on social media, typically seeking those looking for romantic partners, to get the targeted victims' help in cryptocurrency schemes. These targets, whom the fraudsters... Read more →
Photo by Brett Jordan on Unsplash The Internal Revenue Service relies on taxpayers voluntarily filing correct tax returns and paying the tax amount shown on those forms. Millions will be doing just that tomorrow, Oct. 16, to comply with the extended filing deadline. Unfortunately, however, too many people find ways to avoid paying the U.S. Treasury what they legitimately owe. They are why the latest update on the Tax Gap shows it has grown. A lot. The Tax Gap is the amount of money the IRS is owed, but which it hasn't been able to collect. The agency's latest estimates... Read more →
Piles of illicit cash were a plot feature in the AMC show "Breaking Bad." Since meth-making kingpin Walter White couldn't bank it without raising suspicions, he kept his drug money under his floorboards and, finally, in a storage unit, where two underlings once used it to nap sans mattress. Anyone who watches crime programs (guilty!) knows one piece of tax law. Television, streaming, and movie crooks are always careful to avoid five-figure financial transactions. When these on-screen crooks deposit or withdraw more than $10,000 of their ill-gotten funds, the bank must report the large amounts to the Internal Revenue Service.... Read more →
IRS Commissioner Daniel Werfel, pictured at a Senate Finance Committee hearing in February, today announced the agency's new, expansive plans to enforce federal tax laws in a more equitable way. Artificial intelligence (AI) has been part of the Internal Revenue Service's arsenal for a while. Now, thanks to more money from the Inflation Reduction Act, the tax agency is going to use more AI to expand its examinations of high-dollar earners. That includes not only individuals, but also partnerships and corporations. This shift of compliance efforts will shift the IRS' focus from working-class to wealthy taxpayers, noted IRS Commissioner Danny... Read more →
Senate side of the U.S. Capitol. (Photo by Scrumshus - Own work, Public Domain) The Internal Revenue Service's to-do list is pretty packed right now. It just announced that it is implementing paperless tax protocols next year. But a group of U.S. senators say it needs to make fighting crypto tax evasion a priority. They are concerned about the Treasury Department's and IRS' apparent procrastination in complying with the Infrastructure Investment and Jobs Act's (IIJA) mandate of new tax regulations for crypto asset traders. The IIJA-ordered rules would require third parties, such as Coinbase, to report information about individuals' crypto... Read more →
Four U.S. senators with usually divergent policy points of view have agreed that there needs to be stricter control of digital asset trading. When Sen. Elizabeth Warren (D-Massachusetts) introduced her Digital Asset Anti-Money Laundering Act last year (S. 5267), the lone cosponsor was Kansas Republican Sen. Roger Marshall. The latest version of the bill (S. 2669) has added cosponsors Sen. Joe Manchin, the West Virginia Democrat who's often bucks his party's leaders, and Sen. Lindsey Graham (R-South Carolina), now a Donald J. Trump supporter. Four lawmakers isn't many, but the group's agreement shows that Congress is starting to consider tighter... Read more →
Photo by Alesia Kozik Cryptocurrencies have changed not only individuals' views of assets and wealth development, but also countries' tax systems. Those are among the issues explored in a just-released International Monetary Fund (IMF) paper. As for the tax challenges, the IMF paper notes that the capital gains tax revenue at stake worldwide, either because it's not imposed or not collected, may reach well into the tens of billions of dollars. But the more profound risks, say the paper's authors, may ultimately be for value added tax (VAT) and sales taxes. The paper also cites research monitoring crypto transactions. These... Read more →
Photo by Art Rachen on Unsplash News has not been good of late for crypto fans. The Securities and Exchange Commission last night (June 5, 2023) filed an emergency motion in federal court asking a judge to freeze assets in Binance's two U.S. holding companies. The SEC contends that the world’s largest cryptocurrency exchange mishandled funds and lied to regulators. The SEC followed that today by suing Coinbase, alleging that the largest crypto exchange in the United States violated rules that require it to register as an exchange and be overseen by the federal agency. Now, two Democratic congressmen are... Read more →
U.S. crypto fans are not happy with the White House proposal to institute a 30 percent crypto mining tax. They are not alone. European Union (EU) members have agreed to crack down on crypto tax evasion by having member states share digital holdings data. The Directive on Administrative Cooperation (DAC8) introduced last December is a crypto-tax framework that would increase surveillance of crypto exchanges, marketplaces, and other crypto-related services. This latest EU crypto effort aims to increase tax transparency in crypto assets and to combat tax evasion and avoidance. Approval of DAC8 which could generate additional tax revenue of around... Read more →