Accountants move into cryptocurrency

By Michael Cohn
Accounting Today

Accountants are delving into the complexities of digital currencies such as Bitcoin and Ethereum to help their clients keep track of cryptocurrency assets and transactions, as well as the tax consequences, according to a new report.“In the past two or three years, especially with the crypto boom in 2017, it really caught a lot of people by surprise and created issues and complexities that are resulting now or over the past year,” said Muroch. “Those kinds of issues surface when you need to go through an audit or to pay your taxes.”

Read the full article at Accounting Today.

IRS has begun sending letters to virtual currency owners advising them to pay back taxes & file amended returns

By IR-2019-132
IRS

The Internal Revenue Service has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly.
“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties,” said IRS Commissioner Chuck Rettig. “The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”
The IRS started sending the educational letters to taxpayers last week. By the end of August, more than 10,000 taxpayers will receive these letters. The names of these taxpayers were obtained through various ongoing IRS compliance efforts.

Read the full article at IRS .

Canadian court rejects the claim of two Americans by birth over the FATCA information sharing regulations

By Jim Bronskill
The Canadian Press

The federal government has shared more than 1.6 million Canadian records with the U.S. tax service A Canada-U.S. deal that lets Canadian financial institutions send customer information to U.S. authorities to help track down tax cheats does not violate the Charter of Rights and Freedoms, a judge has ruled.

Federal Court of Canada Justice Anne Mactavish dismissed an appeal from two American citizens, Gwendolyn Louise Deegan and Kazia Highton, who now live in Canada and have no real ongoing connection with the United States.

Read the full article at The Canadian Press.

The CRA sent more than 700,000 documents to the IRS in 2017

By Rudy Mezzetta
Advisor's Edge

Intergovernmental agreement between Canada and the U.S. targets offshore tax evasion

The Canada Revenue Agency (CRA) sent more than 700,000 records to the U.S. Internal Revenue Service (IRS) in 2017 as part of a tax-information sharing deal between the two countries, said a CRA official during a roundtable discussion at the annual national conference of the Canadian arm of the Society of Trust and Estate Practitioners (STEP Canada) in Toronto on Friday. The figure is current as of April 2019.

In 2014, the Canadian government signed an intergovernmental agreement (IGA) with the U.S. to exchange tax information on each other’s tax residents on an annual basis…

Read the full article at advisor.ca.

IRS Announces Tax Season Start Date Despite Government Shutdown

By Kelly Phillips Erb
Forbes.com

The Internal Revenue Service (IRS) has announced that tax season will open on Monday, January 28, 2019. The IRS will begin accepting paper and electronic tax returns that day.

The IRS made the start date announcement despite the ongoing government shutdown. “We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig…

Read the full article at Forbes.com.

IRS Sets Withholding Tables as GOP Pledges Paycheck Increase

By Alexis Leondis
Bloomberg

The Internal Revenue Service released guidance for employers about how much tax they should withhold from workers’ paychecks in 2018 — and said it would soon offer an online calculator employees can use to make sure the amounts are correct.

Companies have been awaiting details from the IRS, following the sweeping tax overhaul passed at the end of last month that changes tax rates and brackets, increases the standard deduction and repeals personal exemptions. Employers should begin using the new withholding tables as soon as possible, but not later than Feb. 15, according to the IRS notice issued Thursday.

Republicans have promised that American wage earners will see bumps in their paychecks starting in February — after employers have made the withholding adjustments. House Majority Leader Kevin McCarthy of California has said taxpayers should “check their check.”

Read the full article at bloomberg.com.

How Green Card holders can get the most out of TFSAs and RRSPs

By Cleo Hamel
MoneySense

Q.  I am a  Green Card holder as well as a Canadian resident, and have two questions: No.1. Which are the best securities to invest inside my TFSA to be “friendly” from an Internal Revenue Service and Federal Treasury Board (IRS/FTB) tax point of view? And No. 2. Which are the best securities to invest in an RRSP—again, to be “friendly” from an IRS/FTB tax point of view? Thank you, Mirjana G.

Hi Mirjana. Regarding your RRSP account, you can own any investment you like inside of an RRSP without any issue while you live in Canada. You may even want to hold any dividend-paying U.S .stocks inside your RRSP instead of a non-registered account.

Generally, dividends paid by U.S. companies to Canadians are subject to a tax treaty withholding rate of 15%. The tax treaty waives the withholding on U.S. stocks owned inside of RRSP accounts and is not subject to the passive foreign investment rules (PFICs)…

Read the full article at moneysense.ca.

Victims Of IRS’s Tea Party Bias — And Taxpayers — Must See Lois Lerner’s Testimony, Lawyer Says

By Legal Newsline
FORBES

Lois Lerner, formerly of the Internal Revenue Service when it discriminated against applicants for tax exemptions based on their viewpoints, claims Americans have no right to read statements she made under oath about why she did it.

Lerner, the former director of the IRS’s Exempt Organizations Division, wants U. S. District Judge Michael Barrett to maintain under seal a deposition she gave in June for a civil suit that victims brought in 2013. Unsealing it would place her safety in jeopardy, she says.

Her former IRS colleague, Holly Paz, seeks the same after they targeted groups with “tea party” names and groups that didn’t like how the government was run…

Read the full article at Forbes.com.

2017 Tax Reform

By Mary Beth Lougen
Expat Tax Tools

On December 22, 2017, President Trump signed the Tax Reform and Jobs Act of 2017, which will provide the first significant reform of the U.S. tax code since 1986.

If you are a US person living outside the US, it is not likely you will be impacted in any meaningful way this tax season.

If you are residing in the US and itemize deductions, you have an opportunity to act now to lower your taxes this year and take advantage of deductions that will be disallowed in 2018 (see the section on property taxes below). Most of the changes will affect your 2018 tax returns, which leaves precious little time to act on the few provisions that can benefit you in 2017. Please read below and see the attached pdf for some of the key changes.

If you are a nonresident alien filing Form 1040-NR, you should expect to pay more tax starting in 2018 to the US due to the restriction on state and local tax deductions and the repeal of personal exemptions.

Download the CCH handout in PDF format.

Read the full article at American Expat Tax Services.

Consider putting your U.S. home in a cross-border trust

By TESS KALINOWSKI
Real Estate Reporter

It could mean tax savings for your loved ones if you die, said lawyer David Altro, a cross-border specialist.

Dan and Colette Craig have owned a condo in Cape Coral, Fla., for almost a decade. They know better than to talk politics with the neighbours when they visit.

“We tend to avoid conversations with any U.S. folks regarding (U.S. President Donald) Trump. We don’t initiate that. From an outsider looking in, you really don’t know what you’re talking about,” says Dan.

Politics have nothing to do with the Craigs’ enjoyment of their Florida home and they dream of spending more time there in the future…

Read the full article at thestar.com.