IRS Wins Bitcoin Fight, Gets Access to 14,000 Coinbase Accounts

By Jeff John Roberts
Fortune

Bitcoin speculators aren’t the only ones who stand to cash in from the crypto-currency boom. Uncle Sam is now set to collect back taxes from thousands of customers of a digital currency exchange who failed to report bitcoin transactions.

In a ruling on Tuesday, a federal court judge ordered San Francisco-based Coinbase to comply with a summons that requires it to identify 14,355 accounts, which have accounted for nearly 9 million transactions.

The order, which covers transactions between 2013 and 2015, comes after a prolonged court fight that began when the IRS demanded that Coinbase provide detailed personal information for more than a million customer accounts…

Read the full article at fortune.com.

Meghan Markle’s U.S. citizenship could cause tax headaches for British royal family

By Adam Taylor
Washington Post

It may seem like a modern fairy tale, but the upcoming wedding of Britain’s Prince Harry to American actress Meghan Markle will come with some mundane hurdles. Perhaps most inconveniently for the British royals, this transatlantic partnership could end up involving the United States’ Internal Revenue Service.

Buckingham Palace announced Tuesday that Markle will become a British citizen after her wedding next year. Although some foreign politicians are required to give up their dual citizenship, there are no similar rules for British royals — and there already has been widespread speculation that the union of Prince Harry and Markle eventually could result in some British royal children wielding American passports…

Read the full article at washingtonpost.com.

Why Bitcoin Splits Are Both a Cash Windfall and a Tax Nightmare

By Jeff John Roberts
Fortune

Bitcoin owners received a surprise this August when a parallel version of the currency, known as Bitcoin Cash, was distributed to every existing bitcoin owner on a one-to-one basis.

The new currency soon traded for hundreds of dollars, and during a bout of speculative mania this weekend, one unit of Bitcoin Cash was briefly worth as much as $2,500—not as much as the original, but still a tidy chunk of digital change.

Bitcoin Cash arrived quite literally as free money. The windfall, however, poses potential tax headaches for every bitcoin owner at a time when the IRS is getting more aggressive about digital currency.

How do you tax an “air drop”?

Read the full article at fortune.com.

How Nigerian Scammers Stole $11 Million From the IRS in One of the Biggest Tax Frauds in U.S. History

By Andrew Selsky

(SALEM, Ore.) — A Nigerian man has been sentenced to seven years in federal prison for his role in the bilking of over $11 million via an identity-theft scheme from the Internal Revenue Service, the U.S. Attorney’s office for Oregon said Tuesday.

An IRS agent has said this is one of the largest tax fraud cases in the United States in which stolen personal identification information was used to defraud the IRS, First Assistant U.S. Attorney for Oregon Scott Erik Asphaug told The Associated Press in an email. Its scope is staggering.

An IRS criminal investigation determined the co-conspirators obtained personal identifying information of more than 259,000 people, and used it to acquire over 19,500 electronic filing PINs from the IRS, the U.S. Attorney’s office said in a statement. The co-conspirators obtained and used pre-paid debit cards with the stolen identities to receive direct electronic tax refund deposits. They eventually filed over 10,000 fraudulent federal tax returns, attempting to obtain over $91 million in refunds, with actual losses amounting to over $11 million…

Read the full article at time.com.

Americans Renouncing Citizenship Hits New Record; Tax Bill Won’t Change That

By Robert W. Wood
FORBES

The number of Americans handing in their passports forever is statistically small, but there has been another notable spike. The total for the first quarter of 2017 was 1,313. The number on the second quarter’s list went up to 1,759, which is the second highest quarterly number ever (second only to the fourth quarter of 2016, which had 2,365 published expatriates). The total for the third quarter of 2017 was 1,376, putting the annual tally on track to top 2016’s record. Some observers may want to blame President Trump for the spike, but it is much more likely that longstanding tax issues are the real culprits. And the tax reform now being considered is hardly a game-changer. These ‘published’ numbers are probably lower than the real ones, for a variety of reasons…

Read the full article at Forbes.com.

Plaintiff In Successful Multimillion Dollar Suit Against IRS Speaks Out

By Adam Steele, CPA

On September 8, 2014, Adam Steele joined Brittany Montrois and a “Class of More Than 700,000 Similarly Situated Individuals and Businesses” in filing a class action suit against the federal government seeking to recover allegedly unlawful license fees paid to the Internal Revenue Service (IRS). In June 5, 2017, the Court ruled in favor of the plaintiffs. As a result, tax preparers may be entitled to more than $175,000,000 to be refunded by the IRS. Steele’s first person take on the industry, PTINs, and the case follows…

Read the full article at Forbes.com.

IRS chief departs, blasting Congress for budget cuts threatening tax agency

By Joe Davidson
The Washington Post

Leaving can be liberating.

Republican Sens. Bob Corker (Tenn.) and Jeff Flake (Ariz.) have demonstrated that with their caustic criticisms of President Trump.

Now it’s John Koskinen’s turn.

Thursday is his last day as commissioner of the Internal Revenue Service, allowing his bluntness about Congress on Tuesday.

He started with a veiled dig near the end of his prepared statement during a briefing with reporters…

Read the full article at washingtonpost.com.

Green Card Holder Pleads Guilty of Failing to File FBAR and Report UBS Account, Will Pay More than Half the Assets in FBAR and Tax Penalties

By William Byrnes
TaxConnections

A Greenwich, Connecticut man pleaded guilty October 26, 2017, to failing to report funds he maintained in foreign bank accounts to the Department of Treasury, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, and Chief Don Fort, IRS Criminal Investigation.

According to court documents and information provided in court, Hyung Kwon Kim, a citizen of South Korea and, since 1998, a legal permanent resident of the United States, resided in Massachusetts and later in Connecticut.  Around 1998, Kim traveled to Switzerland to identify financial institutions at which to open accounts for the purpose of receiving transfers of funds from another individual in Hong Kong.  Over the next few years, Kim opened accounts at several banks, including Credit Suisse, UBS, Bank Leu, Clariden Leu, and Bank Hofmann…

Read the full article at TaxConnections.com.