February 2020 Archives

High-Income Non-Filers Will Be Subject To Increased IRS Visits

On February 19, 2020, the IRS issued a news release announcing that "it will step up efforts to visit high-income taxpayers who in prior years have failed to timely file one or more of their tax returns."1 Specifically, IRS revenue officers (trained civil enforcement officers) across the nation will be increasing their in-person visits with high-income taxpayers who have not filed tax returns in 2018 or earlier years. While the IRS claims that the primary goals of these visits are to inform high-income taxpayers of their reporting and paying obligations and to bring them into compliance, the IRS emphasizes that:

Man Sentenced to Prison for Failing to Remit Payroll Taxes to IRS

Our legal system expects a lot out of small business owners. This system expects these entrepreneurs to follow the rules of their chosen business structure while also making sure they meet all required tax obligations. This is on top of balancing their business plan and making sure they are successful within their market. A failure to balance all these factors can lead to a collapse of the business and can come with steep penalties. If the government can support allegations of tax fraud, these penalties can come with prison time.

Florida Attorney General Issues Tips to Help Floridians Avoid Tax Identity Theft Scams

On February 3, 2020, Florida Attorney General Ashely Moody issued a video consumer alert warning taxpayers to "Watch Out for Tax Identity Theft Scams" and providing tips for Floridians to help them avoid becoming victims of scammers.1

Five nations join tax evasion operation

A new tax enforcement organization is set to ramp up the nation’s ability to keep an eye out for tax evasion. The Joint Chiefs of Global Tax Enforcement, or J5, may sound like something out of the Marvel Universe. In reality, it is a collaborative effort of five major intelligence communities working together to bring down those accused of tax evasion.

Have You Received a 1099-K for Cryptocurrency Transactions?

Cryptocurrency exchanges, such as Coinbase and Uphold, have begun issuing Forms 1099-Ks, Payment Card and Third Party Network Transactions, to customers. If you receive a 1099-K from a cryptocurrency exchange, then you can be assured that the IRS is fully aware of your reportable cryptocurrency transactions. This is because cryptocurrency exchanges are required to send 1099-Ks to: (1) customers during any tax year who had payments exceeding $20,000 and engaged in more than 200 transactions in the exchange, and (2) the IRS. Omitting 1099-K information from your tax return will automatically flag your return for underreporting and subject you to IRS penalties.

Updated IRS FAQs Require Appraisals for Charitable Donations of Virtual Currencies

In December of 2019, the Internal Revenue Service (IRS) added two new "Frequently Asked Questions" (FAQs) on its webpage regarding the responsibilities and reporting obligations for charitable organizations that received donations in the form of virtual currencies.1 One of these FAQs imposes an appraisal requirement for large donations of virtual currencies-increasing already existing concerns that such a requirement will discourage charitable giving.

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