In November 2017 the IRS was successful in federal court in its quest to gain access to bitcoin transactions. They now have the records for any transaction worth more than $20,000, including exchanging bitcoins for dollars, and sending or receiving bitcoins to/from another user. The time frame of available information covers transactions between 2013 and 2015. The IRS is expecting a large number of bitcoin users to pay taxes owed on unreported transactions. We would be surprised if this was the end of the quest for information by the IRS. With 2016 and 2017 being big years for bitcoin activity, and other successful cryptocurrencies being left out of the November 2017 court order, a lot of possible unreported transactions are not covered by this subpoena. (more…)
By Franceen Borrillo, Principal
We want to make our clients aware that on June 13, 2017, the U.S. Internal Revenue Service and the Department of the Treasury re-released proposed regulations (REG 136118-15) that provide guidance on the new centralized partnership audit regime. The proposed regulations implement the new centralized partnership audit regime enacted as part of the Bipartisan Budget Act of 2015 (BBA). (more…)
Based on an IRS investigation, taxpayers numbering only in the 800’s in each of the years 2013 through 2015 reported a transaction description likely related to Bitcoin on the form used to report capital gains or losses from property transactions. In 2013, the IRS issued guidance to say that virtual currency transactions were property transactions, rather than currency transactions, and followed that up with practical guidance in April 2014 in their Virtual Currency Guidance, Notice 2014-21. (more…)
In an International Practice Unit (IPU), the IRS outlined the steps its auditors should take when issuing a recordkeeping and reporting summons to a U.S. corporation that is 25% owned by a foreign shareholder.
The tax agency also elaborated on what to do when the U.S. corporation doesn’t substantially comply with the summons.
Final IRS Regs Kill Foreign Goodwill Exception and Limit Active Trade or Business Exception for Outbound Transfers of Intangibles
The IRS issued final regs that affect U.S. taxpayers who transfer property to foreign corporations in nonrecognition transactions.
The regs are aimed at preventing taxpayers from avoiding recognition of gains or income attributable to high-value intangible property by claiming that a large share of the transferred property’s value is foreign goodwill or going concern value.
The regulations contain the following changes to Section 367 of the Internal Revenue Code. They: (more…)
By Samantha Ramirez, Tax Senior
ASL Nonprofit Group
For nonprofit organizations, no income tax may be due, but an annual return must be provided by certain exempt organizations in order to maintain tax-exempt status. Tax-exempt organizations typically file a Form 990, but depending on the amount of gross receipts or the total value of assets, the organization may have options for filing a more simplified form. Below we have outlined the requirements for each form: (more…)
Late last year, we wrote a few times about the looming regulations affecting valuation discounts under the IRS Proposed Section 2704 Regulations.
The comment period ended on November 1st and the public hearing in Washington D.C. was held on December 1st to a capacity crowd. Here are some quick highlights from the hearing that were published by BV Wire: (more…)
The IRS said it plans to modify the regs relating to certain triangular reorganizations involving foreign corporations.
Specifically, in Notice 2016-73, the tax agency announced it will alter the rules affecting the treatment of property used to acquire parent stock or securities in triangular reorganizations involving one or more foreign corporations, as well as describe the consequences to persons that receive parent stock or securities in those reorganizations. (more…)
By Jeff Faust, Director of Valuation Services
ASL Valuation Services
Earlier this year, we wrote about the looming regulations affecting valuation discounts. Now the IRS’ Proposed Section 2704 Regulations have been officially presented and they intend to eliminate discounts currently available for gifts between family members inside family controlled entities. Despite court cases and revenue rulings to the contrary, the IRS’ proposals assume that families always work together and do not keep the restrictions in place that are the basis for the minority interest discount. (more…)