IRS AUDITS MICRO-CAPTIVES, CRYPTOCURRENCY AND CONSERVATION EASEMENTS

The IRS announced today that it plans to begin auditing several thousand more taxpayers that have operated section 831(b) or micro-captive insurance companies in the coming months. The IRS has been aggressively pursing taxpayers operating section 831(b) captives for several years, and it has been successful in its Tax Court litigation. The IRS's success in the courtroom has translated to success in audits as it essentially forces taxpayers to either concede or litigate with little opportunity for a resolution somewhere in between. As part of the announcement, the IRS publicized that nearly 80% of taxpayers offered its settlement initiative (a 90% taxpayer concession) have accepted it. CRYPTOCURRENCY AUDITS The taxation of cryptocurrency is no longer just a young person’s problem. That changed the day the United States Internal Revenue Service made cryptocurrency a focal point of enforcement and added a crypto disclosure question on its Form 1040. Unsuspecting parents with dependent children should be on guard. The IRS is looking for noncompliance, and crypto questions create a possibly perjurious trap. Noncompliance may be sleeping in the basements of many unwary parents. CONSERVATION EASEMENTS ARE AUDITED Starting in the early 2000’s, developers and tax shelter promoters began exploiting conservation easements to provide huge tax deductions for donations that provided little or no conservation benefit. The problem reached the point that the IRS issued Notice 2017-10 which described certain syndicated conservation easement arrangements and listed them as tax shelter transactions. The IRS is auditing easements. 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