When Inflation Isn't All Bad?... [ read ]
Our wealth transfer tax system provides taxpayers with exclusions from certain taxes. These exemptions are adjusted annually; the amount of the adjustment is tied to the Consumer Price Index...
The Merge: Will Ether Holders Have a Taxable Event Upon a Successful Merge?... [ read ]
Today marks a day years in the making in the crypto world. Today, the Ethereum blockchain is scheduled to convert from a Proof of Work system to a Proof of Stake system. This is commonly known as "the Merge." As background, a Proof of Work system relies on miners expending massive amounts of energy to create—or "mine"—new blocks in a blockchain. A Proof of Stake system, on the other hand, relies on people staking their cryptocurrency—essentially locking it up from trading for a period of time. Those who stake a sufficient amount of cryptocurrency are then able to validate transactions for, and add new blocks to, the blockchain. Both miners and stakers receive rewards in the form of cryptocurrency for their efforts.
When is an Amended Return NOT A Qualified Amended Return?... [ read ]
In a prior blog post I discuss options for correcting mistakes and omissions on tax returns and other IRS filings, including filing a qualified amended tax return ("QAR"). A recent Tax Court opinion, Lamprecht v. Commissioner, T.C. Memo. 2022-91, discusses a taxpayer's attempt to avoid the accuracy-related penalty by filing what the taxpayers hoped were QARs.
The IRS Wants to Interview Me. What Are My Rights?... [ read ]
It can be intimidating for any taxpayer to be contacted by the IRS, much less be interviewed by the IRS. Although I have never asked how they came to the conclusion, some of my clients have said the IRS is more intimidating than the police or FBI. Any taxpayer who is contacted by the IRS for an interview has a right to representation and although the IRS has done a poor job in letting taxpayers know this right, a recent report from the Treasury Inspector General for Tax Administration (TIGTA) says that the IRS is getting better.
IRS Announces Automatic Penalty Relief for Certain Tax Year 2019 and 2020 Returns... [ read ]
A kinder and gentler IRS? Who knows. One can only hope that the IRS' latest move – granting sweeping, automatic penalty relief for a multitude of tax year 2019 and 2020 return filings – is trend-setting.
Cash Nana and Papa's Checks Before They Die So the Gift is Completed... [ read ]
Fans of "Seinfeld" will recall that Jerry's grandmother, who everyone referred to as Nana, gave Jerry a $10 check every year for his birthday, which he never cashed. Years later Jerry's "financial advisor", Kramer, convinces Jerry to cash Nana's checks, however because Nana had closed the bank account, the checks bounce. Nana gets lost while trying to make the checks good.
The IRS Wants to Know About Your Crypto: More John Doe Summonses Sought... [ read ]
Although Forms 1099-B are not yet required to be issued by cryptocurrency exchanges (like Coinbase, Crypto.com, and FTX), the IRS is not waiting to get information about cryptocurrency transactions. One of the weapons the IRS has used quite successfully in this arena are "John Doe" summonses.
Treasury Secretary to IRS: Use Extra Money to Only Audit the Wealthy... [ read ]
With the IRS poised to receive a legislative windfall of $80 billion over the next 10 years, the IRS' directive is clear: audit higher-income taxpayers only. In an August 10, 2022 letter to IRS Commissioner Charles Rettig, U.S. Secretary of Treasury Janet Yellen did not mince words in issuing her mandate.
An IRS Problem that Money May Not Solve... [ read ]
IRS Checklist: Increased 2022-2023 fiscal year funding? Check. $80 billion bonus over 10 years? Check. Lose potentially two-thirds of your workforce over the next six years? Umm... Check.
IRS Expands Form 1040 Reporting of Digital Assets for Tax Year 2022... [ read ]
The IRS has seemingly endless curiosity when it comes to cryptocurrency and other digital assets. For tax year 2022, the IRS seeks to expand Form 1040 reporting to require disclosure of all inward and outward transfers of digital assets – whether tradeable or not, whether taxable or not.
