The Internal Revenue Service (IRS) has taken an interest in Coinbase. Coinbase is a cryptocurrency company, specializing in this form of digital currency. The federal agency has requested the company release the names of its customers.
The Foreign Account Tax Compliance Act (FATCA) requires certain United States taxpayers to report foreign assets to the Internal Revenue Service (IRS). This is in addition to other requirements, such as filing the Report of Foreign Bank and Financial Accounts (FBAR) form.
There are a number of legal ways to reduce tax obligations. Some of these methods are common, known to anyone that has filed taxes. Basic deductions like charitable donations are a common example. Other maneuvers are more specialized.
The fact that the Internal Revenue Service (IRS) is cracking down on offshore accounts and foreign tax compliance issues is not a new one. Media outlets have been covering this story for months. However, the agency recently took a big step that will push these efforts to the next level.
U.S. companies and their oversea affiliates are prohibited from certain interactions with countries that are listed as boycotted. In some cases, the United States Government may sanction a request. An understanding of the potential tax implications of these dealings is beneficial for any business operating in qualifying countries.
Foreign financial institutions that provide financial accounts to U.S. taxpayers or foreign entities that have a substantial ownership interest by a U.S. taxpayer are generally required to report information to the IRS. In some cases, this requires completion of an FFI agreement.
If you are a United States taxpayer with interest in a foreign asset, odds are high you know that you must report this interest to the government. A failure to do so can result in serious penalties, ranging from steep monetary fines to potential imprisonment. The severity of the penalties often hinges on one thing: whether or not the failure to report was willful.
Congress is considering a new tax proposal that would result in a minimum tax applied to the foreign earnings made by U.S. companies’. The effort is viewed as an attempt to keep funds here in the United States as opposed to sending them overseas.
Glen Frost, managing partner of Frost & Associates, was quoted in an article featured in the USA Today speaking on taxpayers rights. Most individuals are aware of the severe consequences they may face if they break a tax law, even if it was done accidentally. However, most aren't well versed in the rules that the IRS must follow. Glen Frost says "It's often helpful to reference these rights when talking with the IRS." The key to this is knowing them.
As its customer service budget has shrunk in recent years, the IRS has pushed hard to get people to go online with tax questions.Online resources do not take the place of a phone conversation with a tax compliance professional. But the IRS website, IRS.gov, does generally have a lot of information. Is the information there reliable?