IRS Audits Conservation Easements and Virtual Currency

Syndicated conservation easements are private placements that promise tax deductions worth four to four-and-a-half times a person’s investment. Some syndicated conservation easement deals are offering investors charitable contribution deductions on taxes for large amounts. According to the IRS, coordinated examinations are being conducted across the IRS in the Small Business and Self-Employed Division, Large Business and International Division and Tax Exempt and Government Entities Division. Separately, investigations have been initiated by the IRS' Criminal Investigation division. These audits and investigations cover billions of dollars of potentially inflated deductions as well as hundreds of partnerships and thousands of investors. Virtual currency audits The IRS in its latest release says that failure to properly report virtual currency activity may result in an audit and potentially civil penalties and interest. The release says that in extreme circumstances, the taxpayer may even be exposed to criminal liability for tax crimes like filing a false return or tax evasion. These offenses can carry significant prison time and up to $250,000 in fines. For the first time the IRS has warned not only of potential civil penalties and interest, but also of criminal prosecution. The agency points out that the anonymous nature of digital currency should not lull taxpayers into thinking that real, taxable gain from related transactions is also out of sight. The current IRS grace period for reporting such transactions appears to be coming to a close and its patience for nonreporting seems to be running out. It is important that anyone who conducts business, makes investments or performs transactions in cryptocurrency understands whether IRS reporting responsibilities exist or whether taxes may be owed. Lance Wallach receives hundreds of calls per year regarding these and other types of audits. As an expert witness Lance's side has never lost a case. Contact Lance and his team of experts before it's too late. 516-236-8440 Wallachinc@gmail.com