Virtual Currency? The IRS Is Looking For You.
September 10, 2019
Last year the Internal Revenue Service (IRS) announced a Virtual Currency Compliance Campaign to address perceived noncompliance by taxpayers related to the use of virtual currencies (e.g., Bitcoin).
More recently, the IRS sent letters to more than 10,000 taxpayers with virtual currency transactions who may have failed to properly compute and report taxable income. The educational letter has three variations: Letter 6173, Letter 6174 or Letter 6174-A.
The letters encourage taxpayers to review their previous tax return filings and amend them as necessary in order to self-declare the income and pay the tax, interest and penalties due.
According to IRS Commissioner Chuck Retting, the IRS is continuing to expand its enforcement efforts connected with virtual currency, including the use of data analytics. They’re also making more resources available to taxpayer to help them fully understand and meet their obligations.
While some countries may not tax virtual currency transactions, the United States is not one of them. The IRS considers virtual currency property for federal tax purposes and provides guidance on how general federal tax principles apply to virtual currency transactions. State income tax laws should also be reviewed to determine the proper tax treatment and compliance requirements.
If you received one of the letters from the IRS and would like assistance, please contact us.
U.S. - France Agree CSG and CRDS Are Eligible for FTC
June 28, 2019 // by The U.S. Internal Revenue Service
The United States and the French Republic recently memorialized through diplomatic communications an understanding that the French Contribution Sociale Generalisee (CSG) and Contribution au Remboursement de la Dette Sociate (CRDS) taxes are not social taxes covered by the Agreement on Social Security (i.e. Totalization Agreement) between the two countries.
Accordingly, the IRS will not challenge foreign tax credits for CSG and CRDS payments on the basis that the Agreement on Social Security applies to those taxes. For certain U.S. taxpayers, this could mean they are eligible to claim a larger foreign tax credit on their U.S. income tax return. They may also be eligible to receive a refund of U.S. income tax by filing an amended U.S. personal income tax return income tax for prior years.
Taxpayers have 10 years to file a claim for refund of U.S. tax with respect to a foreign tax credit. The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year to which the foreign taxes relate. The IRS will update information on claiming these taxes as foreign tax credits soon.
The foreign tax credit computation is complex. U.S. taxpayers who are subject to CSG and CRDS taxes should discuss this development with their tax advisors.
