Category Archives: From Live Blog

In a Rev Proc 2016-56,2016-51 IRB, the IRS has updated two lists of countries with which the U.S. has in effect an agreement that requires payors to report certain deposit interest paid to nonresident alien individuals who are residents of the other country under Reg. § 1.6049-8(a) and Reg. § 1.6049-4(b)(5).
 
One list is of countries with which the U.S. has in effect an income tax or other treaty or a bilateral agreement and the other is of countries with which IRS has determined that an automatic exchange of information is appropriate. 

The following are the countries with which the United States has in effect an income tax or other convention or bilateral agreement relating to the exchange of tax information within the meaning of section 6103(k)(4) pursuant to which the United States agrees to provide, as well as receive, information and under which the competent authority is the Secretary of the Treasury or his delegate:

1. Antigua & Barbuda
2. Aruba
3. Australia
4. Austria
5. Azerbaijan
6. Bangladesh
7. Barbados
8. Belgium
9. Bermuda
10. Brazil
11. British Virgin Islands
12. Bulgaria
13. Canada
14. Cayman Islands
15. China
16. Colombia
17. Costa Rica
18. Croatia
19. Curacao
20. Cyprus
21. Czech Republic
22. Denmark
23. Dominica
24. Dominican Republic
25. Egypt
26. Estonia
27. Finland
28. France
29. Germany
30. Gibraltar
31. Greece
32. Grenada
33. Guernsey
34. Guyana
35. Honduras
36. Hong Kong
37. Hungary
38. Iceland
39. India
40. Indonesia
41. Ireland
42. Isle of Man
43. Israel
44. Jamaica
45. Jersey
46. Korea, Republic of
47. Latvia
48. Liechtenstein
49. Lithuania
50. Luxembourg
51. Malta
52. Mauritius
53. Mexico
54. Netherlands
55. New Zealand
56. Norway
57. Poland
58. Saint Lucia 
59. Slovak Republic
60. Slovenia
61. South Africa
62. Spain
63. Sweden
64. United Kingdom

 

Pocedurally Taxing  recently posted regarding Dave Breen's, the acting Director of Villanova’s Low Income Taxpayer Clinic, view regarding the case of Greenfield v US; a recent IRS setback in a summons enforcement case out of the Second Circuit.

Dave's take on this recent case is that taxpayers and some practitioners may believe that the era of IRS investigating offshore tax evasion has run its course.  He thinks this case does just the opposite.

The Court’s decision demonstrates that much of IRS’s data on offshore tax evasion is dated, possibly even too old to be of any value, but he also suspect that IRS has come to the same conclusion. 

Rather than moving on to other areas of non-compliance though, he suspects that the IRS at this moment is developing more tools to secure the next wave of current information on offshore tax evasion.  This does not bode well for taxpayers who so far have avoided IRS’s inquiry into their offshore holdings. To Read More...

According to Law 360 a California federal court Thursday authorized a John Doe summons by the IRS to obtain information from virtual currency exchanger Coinbase Inc. so it can investigate whether the company’s customers avoided paying taxes on transactions made through the company.

San Francisco-based Coinbase itself has not been accused by the IRS of engaging in nefarious activity, but the agency believes records of transactions made via the company’s currency exchange business could reveal the identities of individuals who have failed to pay taxes on transactions made via encrypted digital currencies between 2013 and 2015.

“Transactions in virtual currency are taxable just like those in any other property,” said IRS Commissioner John Koskinen in a statement. “The John Doe summons is a step designed to help the IRS ensure people doing business in the emerging economy are following the tax laws and meeting their responsibilities.”

Unlike traditional cash or banking transactions, exchanges made via cryptocurrencies like bitcoin are anonymous and free of third-party reporting.

According to the IRS’s petition for the John Doe summons, the agency has identified at least one individual and two corporations that held Coinbase accounts and used bitcoin transactions to conceal taxable activities including repatriation of untaxed offshore assets.

The IRS also notes that because exchange rates of virtual currency against traditional currencies are fluid, gains made through the purchase or sale of cryptocurrency are taxable under U.S. law.

The summons will allow the IRS to gain access to Coinbase’s database of customers in order to establish whether those customers have paid their tax liabilities.

In granting the summons U.S. District Judge Jacqueline Scott Corley found there is a reasonable basis for the government to believe virtual currency users may not be in compliance with federal tax laws.