STEVEN TOSCHER and MICHEL STEIN to speak on New IRS Scrutiny on Cryptocurrency Reporting: Filing Requirements and Exchange Treatment
We are pleased to announce that Steven Toscher and Michel Stein will be presenting at an upcoming STRAFFORD WEBINAR: NEW IRS SCRUTINY ON CRYPTOCURRENCY REPORTING: FILING REQUIREMENTS AND EXCHANGE TREATMENT. Wednesday, June 5, 2019 from 10:00 a.m. – 11:30 p.m. (EDT)/1:30 p.m. to 2:30 p.m. PST. For more information Click Here.
The IRS announced concern over “massive” underreporting of such income and has dedicated considerable time and resources to investigating possible tax fraud by underreporting income from cryptocurrencies. Tax counsel, accountants and advisers for clients using cryptocurrency must understand the reporting requirements for exchange transactions and the IRS scrutiny that clients who engage in cryptocurrency transactions are likely to face in the future.
Crypto currency is digital currency using encryption techniques, rather than a central bank, to generate, exchange and transfer units of currency. Uniquely, no bank or government authority verifies the transfer of funds. Investors may use “mining operations,” purchase, receive payment, or transfer crypto units to and from another user.
Initial IRS guidance on cryptocurrency (IR 2014-36), treated all virtual currency as property rather than currency for U.S. tax purposes. Treasury left several questions unanswered, including whether cryptocurrency is business property eligible for tax-free exchange under Section 1031 and whether cryptocurrency must be reported on Foreign Bank Account Reports (FBARs) or other foreign asset disclosure forms such as Form 8938. The 2017 tax reform impacts the analysis with its limitation on like-kind exchanges for non-real property transactions. Now, in furtherance of their initiatives, the IRS Large Business & International Division (LB&I) recently added virtual currency to its list of compliance campaigns.
Listen as our experts provide practical guidance on advising clients of U.S. tax reporting and payment obligations arising from cryptocurrency transactions.