Digital Asset Contractors Sought by IRS
On 6/23/23, the IRS issued a Request for Information (RFI) though its Enterprise Digital Asset Initiative Project Office (DAIPO) “specifically seeking to improve the use of data and technology to identify and address digital assets noncompliance”. The RFI is another indication that the IRS continues to invest in digital asset compliance that includes digital asset […]
FinCEN: Mission, Priorities and Successes
On April 27, 2023, Himamauli Das, Acting Director of FinCEN spoke before the Committee on Financial Services U.S. House of Representatives. His Statement reiterated FinCEN’s mission to safeguard the financial system from illicit use, combat money laundering and its related crimes including terrorism, and promote national security through the strategic use of financial authorities and […]
Form 1099-K: Understanding what the IRS wants you to know
The American Rescue Plan Act of 2021 lowered the threshold for reporting third party network transactions from aggregate payments exceeding $20,000 to aggregate payments exceeding $600 during the calendar year and eliminated the 200-transaction threshold for reporting third party network transactions entirely with respect to Form 1099-K. Although the IRS announced in late 2022 that […]
Digital Assets Transactions Subject to IRS Increased Enforcement Activities
On 4/5/23, the IRS published the Inflation Reduction Act Strategic Operating Plan where it states that the Agency will pursue enforcement for complex, high-risk and emerging issues; including digital assets transactions. IRS reports in its Operating Plan that digital asset transactions have high risk for non-compliance. Despite the IRS’s resource limitations, the Agency reports that […]
Offshore Digital Assets Information Exchange Coming!
The Biden Administration General Explanations of the Administration’s Revenue Proposals for Fiscal Year 2024 discusses the proposal for exchange of information reporting by financial institutions and offshore digital asset brokers. The proposal for exchange of information stems from the sentiment that tax evasion using digital assets continues to be a rapidly growing problem. The global […]
Crypto Asset Related Activities Assessed by the FDIC
On 4/5/23, the FDIC released its 2023 Spring Consumer Compliance Supervisory Highlights. The purpose of the Supervisory highlights is to provide an overview of consumer compliance issues identified through the FDIC’s supervision of state non-member banks and thrifts in 2022. The FDIC supervises approximately 3,000 state-chartered banks and thrifts that are not members of the […]
Foreign Digital Asset Accounts to be Reported
The Biden’s Administration 2024 Revenue Proposal includes US taxpayer reporting requirements for foreign digital asset accounts. The proposal would be effective for returns required to be filed after December 31, 2023. Tax compliance and enforcement with respect to digital assets continues to be a growing problem for the US Government given that the digital asset […]
Check Fraud FinCEN Alert
On February 27, 2023, FinCEN issued (in close collaboration with the United States Postal Inspection Service) an Alert on Nationwide Surge in Mail Theft-Related Check Fraud Schemes Targeting the U.S. Mail. Despite the declining use of checks in the United States, Criminals have been increasingly targeting the U.S. Mail and United States Postal Service mail […]
What does the warning regulators gave banks regarding Crypto mean to you?
In January 2023, regulatory agencies; including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller issued a Joint Statement on Crypto-Asset Risks to Banking Organizations. The warning asks the banking system to do everything in its power to avoid having the risks related to […]
Crypto Value Decline Not Equal to Crypto Tax Deduction
Given that we are in full swing of tax season, many taxpayers are exploring the possibility of claiming a crypto tax deduction over their “devalued” crypto assets. Taxpayers ought to refer to the IRS Chief Counsel Advice Memorandum Number: 202302011 dated 1/13/2023 for clarity. The Memorandum responds to non-taxpayer specific advice regarding the applicability of […]
Beware of Digital Asset Scams
Digital asset scams can occur in different ways through several different avenues. Although the ways and the avenues differ, the end result is always the same: there is a scammer that is trying to appropriate the consumer’s funds via the human-machine interaction. The Federal Trade Commission (FTC) alerts consumers that: only scammers demand payment in […]
Digital Assets 2022 Form 1040 Question Checklist
Form 1040 2022 changes the crypto terminology from “virtual currency” to “digital assets”. The purpose of the change in terminology could be interpreted as a “head up” to taxpayers that the IRS is looking more closely as well as an intention to provide more clarity. That said, taxpayers ought to treat the expanded terminology or […]
