IRS Notice 2014-21
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Finally the IRS Clarifies Its Position on Cryptocurrency

It took five years, but the Internal Revenue Service (IRS) has finally released some guidance on the taxation of cryptocurrencies! On October 9, 2019, the IRS released Revenue Ruling 2019-24 and several “frequently asked questions” (and answers) which deal with some (but not all) of the federal income tax issues involved with cryptocurrencies. Over the years, we have reported on the issues involved with cryptocurrencies, including the potential controversies that have ensued because of a lack of guidance. Call for Compliance: Cryptocurrency May Be Subject to US Tax Cryptocurrencies & State Tax: Transactions with Virtual Currency Digital Token Offerings and Sales under Regulation S Watch Your Mailbox: IRS Letters Warning of Cryptocurrency Non-Compliance on Their Way Governments Are Pulling Back the Crypto-Currency Curtain The IRS May Be Coming for Your Bitcoins IRS Criminal Investigation Division Expects Official “Stand up” of National Coordinated...

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Watch Your Mailbox: IRS Letters Warning of Cryptocurrency Non-Compliance on Their Way

On July 26, 2019, the Internal Revenue Service (IRS) issued a press release informing the public that it is sending more than 10,000 letters to taxpayers with potentially unreported (or misreported) virtual currency transactions. The letters will inform them of the possible reporting requirements that may apply to these transactions and advise them of the need to correct past errors. As IRS Commissioner Chuck Rettig notes in the release, “Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties. . . .The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.” As we have previously reported, the IRS has stepped up its enforcement efforts regarding the reporting of cryptocurrency holdings and transactions in...

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LB&I Announces Five New Campaigns

On July 2, 2018, the Internal Revenue Service (IRS) Large Business and International (LB&I) Division announced the identification and selection of five new campaigns. These new campaigns follow the initial 13 campaigns announced on January 31, 2017, followed by 11 campaigns announced on November 3, 2017, 5 campaigns announced on March 13, 2018, and six campaigns announced on May 21, 2018. The following are the five new LB&I campaigns by title and description: Restoration of Sequestered AMT Credit Carryforward LB&I is initiating a campaign for taxpayers improperly restoring the sequestered Alternative Minimum Tax (AMT) credit to the subsequent tax year. Refunds issued or applied to a subsequent year’s tax, pursuant to IRC Section 168(k)(4), are subject to sequestration and are a permanent loss of refundable credits. Taxpayers may not restore the sequestered amounts to their AMT credit carryforward. Soft letters will be mailed to taxpayers who are...

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