IRS CRACKS DOWN ON CRYPTOCURRENCY AND MICRO-CAPTIVES

WARNING! IRS Has Obtained Records of Bitcoin Buyers and Sellers to Determine if Taxpayers Failed To Report Gains on Their Tax. With only several hundred people reporting their crypto gains each year since bitcoin’s launch, the IRS suspects that many crypto users have been evading taxes by not reporting crypto transactions on their tax returns. And now that like-exchange treatment is prohibited on transactions that occur after 2017, now is the ideal time to be proactive and come forward with voluntary disclosure to lock in your deferred gains through 2017, eliminate your risk for criminal prosecution, and minimize your civil penalties. Don’t delay because once the IRS has targeted you for investigation – even it’s is a routine random audit – it will be too late voluntarily come forward. MICRO-CAPTIVE AUDITS For years, the Internal Revenue Service (IRS) has audited so-called “abusive micro-captive insurance transactions.” The IRS is focused on certain captive arrangements that were marketed towards small to mid-sized businesses in a manner more akin to tax shelters. In IRS Notice 2016-66, the IRS identified these types of captive insurance arrangements. In the courts, the IRS has had a string of recent victories against these captive arrangements. For example, in three recent cases, the U.S. Tax Court has not only disallowed the deduction for insurance premiums paid but also required the captive insurance company to include the payments received in income (the “double whammy”). See Avrahami v. Commissioner, 149 T.C. 144 (2017); Syzygy Insurance Co. v. Commissioner, T.C. Memo. 2019-34; Reserve Mechanical Corp. v. Commissioner, T.C. Memo. 2018-86. 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