IRS Disclosure Program

CRYPTOCURRENCY If you have not yet reported your virtual currency transactions, you should consider amending prior years’ tax returns and/or participating in the IRS Voluntary Disclosure Program. Keep in mind that if the IRS deems the failure to report your cryptocurrency holdings as fraudulent, there is no time limit for the agency to audit fraudulent tax returns. CAPTIVE INSURANCE AUDITS The IRS has been targeting abuse of micro-captive insurance companies for some time now. In 2014, these schemes were listed on the “Dirty Dozen” list of tax scams that the IRS issued, and the IRS included micro-captive insurance schemes in Notice 2016-66 that it issued in 2016. Some taxpayers have challenged the IRS when it disallowed tax benefits under micro-captive insurance companies, but the IRS has consistently prevailed in court. IRS AUDITS CONSERVATION EASEMENTS IRS Commissioner Chuck Rettig announced on Nov. 12 that the IRS will be pursuing criminal cases against promoters, taxpayers, tax preparers, and other individuals who help proliferate abusive syndicated conservation easements. In addition, the IRS will be scrutinizing the nonprofits that participate. When the IRS identifies an abusive tax shelter scheme as a “Listed Transaction,” the scheme usually dies out because taxpayers and promoters must self-identify their transactions to the IRS and thereby invite audit. Unfortunately, the syndicated conservation easement shelter is so lucrative that bad actors are still widely promoting it throughout the country, even though the IRS listed it as an abusive shelter two years ago in Notice 2017-10 and has ramped up enforcement efforts. 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