IRS AUDITS CAPTIVE INSURANCE AND CRYPTOCURRENCY

The IRS has been expressing concerns about micro captives for years, and it put the arrangements on its “Dirty Dozen” problem tax arrangements list for 2014. The Internal Revenue Service says it’s forming 12 audit teams to go after what it sees as “several thousands” abusive micro-captive insurance arrangements. The new examination teams will be made up of employees from the IRS Large Business and International and Small Business/Self-employed divisions, IRS officials announced Friday. “These teams will use all available enforcement tools, including summonses, to obtain necessary information,” the IRS said in the announcement. ”Potential civil outcomes can include full disallowance of claimed captive insurance deductions, inclusion of income by the captive entity and imposition of all applicable penalties.” CRYPTOCURRENCY AUDITS If you had a virtual currency transaction in the past few years and didn’t report it, the IRS may likely contact you. The move is part of an ongoing IRS campaign to ensure taxpayers who are in virtual currency markets properly meet their tax obligations. People who get these letters could actually owe the IRS additional tax. “The IRS didn’t pull names out of a hat. They use information from third parties and reports they must file to identify taxpayers who may have taxable transactions.” - Lance Wallach, tax expert. Lance Wallach receives hundreds of calls annually to help people fight the IRS and get their money back from the promoters of these scams. Google Lance Wallach and your advisor, who do you trust? 516-236-8440 Wallachinc@gmail.com