Recently, Elon Musk announced that purchasers of Tesla may buy one with their Bitcoin. But be aware that the IRS is watching. If you purchase a Tesla with Bitcoin, and you bought the Bitcoin at a price lower than the cost of the Tesla, you will incur capital… Read More
Crypto Hard Fork is Taxable Gross Income
A new IRS Chief Counsel Advice 202114020 Memorandum was issued answering the question of whether a taxpayer who received Bitcoin Cash as a result of the August 1, 2017, Bitcoin hard fork has gross income under section 61 of the Internal Revenue Code. The answer is yes. A… Read More
New IRS Crypto Initiative: Operation Hidden Treasure
The IRS has added another enforcement tool in its quest to root out crypto tax evasion. The new IRS initiative, named “Operation Hidden Treasure”, is a partnership between the Office of Civil Fraud Enforcement and the Criminal Investigation Unit to snuff out tax evasion from cryptocurrency owners. The… Read More
Be Sure You “Actually” File Your Tax Return.
If you are in IRS Collections, dealing directly with a Revenue Officer, delivering your tax return directly to that Revenue Officer, upon his or her request, is not an “actual” tax return filing. Not “actually” filing a tax return has many important implications. Namely, you need to “actually”… Read More
IRS Audits at Historic Lows
IRS audit levels are at historic lows. A Report by the Treasury Inspector General for Tax Administration suggests that the IRS should reprioritize its audit and collection efforts. More specifically, it should change the manner in which its models select audits and predict collectability. The Report found that… Read More
Parent’s Beware: Crypto “Kiddie” Tax
The taxation of cryptocurrency is no longer just a young person’s problem. That changed the day the Internal Revenue Service (IRS) made cryptocurrency a focal point of enforcement and added a crypto disclosure question on IRS Form 1040. Unsuspecting parents with dependent children should be on guard. The… Read More