Court Harpoons Kraken’s Attempt to Sink Summons Enforcement - Mary Katherine Browne, Tax Notes ($):
In a June 30 order in United States v. Payward Ventures Inc., Magistrate Judge Joseph C. Spero of the U.S. District Court for the Northern District of California ordered Payward Ventures Inc., the parent company of cryptocurrency exchange Kraken, to produce information on certain users who engaged in digital asset transactions from 2016 through 2020.
...
After reviewing arguments, Spero granted the government’s petition to enforce the summons regarding users’ names, birthdates, taxpayer identification numbers, addresses, phone numbers, email addresses, certain documents, and transactional ledgers.
Taxpayers with Kraken accounts who failed to report their crypto transactions on their 1040s might want to get kraken on filing amended returns.
The new scheme involves a mailing coming in a cardboard envelope from a delivery service. The enclosed letter includes the IRS masthead and wording that the notice is "in relation to your unclaimed refund."
Like many scams, the letter includes contact information and a phone number that do not belong to the IRS. But it also seeks a variety of sensitive personal information from taxpayers – including detailed pictures of driver's licenses – that can be used to by identity thieves to try obtaining a tax refund and other sensitive financial information.
Be smart out there.
GOP Leaders Seek Special Review Of IRS Whistleblowers - David van den Berg, Law360 Tax Authority ($):
A letter the five lawmakers sent asked Special Counsel Henry J. Kerner for a briefing by July 19 on their requests for immediate review of all allegations of retaliation against the IRS agents and the pursuit of discipline against anyone who acted illegally against them.
Gary Shapley, a supervisory special agent with the IRS Criminal Investigation division, and a second unnamed whistleblower have alleged in interviews with the House Ways and Means Committee that the DOJ slow-walked its investigation of Hunter Biden's tax affairs and that they were pulled off the case for raising their concerns.
How sellers of L.A. mansions are dodging a tax meant to help the homeless - Erica Werner, Washington Post. "Instead, wealthy Angelenos rebelled, putting the brakes on sales of homes priced at $5 million and above — those targeted by the initiative — with the result that the tax has raised far less money than expected since taking effect April 1."
Calif. Use Tax Applies To Yacht Stored In State, Office Rules - Jaqueline McCool, Law360 Tax Authority ($). "California use tax applies to the storage and use of a sailing yacht bought by a California resident despite the owner's intent to use the yacht in Mexico, the state Office of Tax Appeals ruled."
Biden won a global tax rate. Now Americans wonder if it was a good deal. - Julie Zauzmer Weill, Washington Post:
Democratic Wisconsin governor guts Republican tax cut before signing state budget - Joe Jacquez, The Hill. "Evers used his constitutional veto power to reduce the income tax cut included in the budget passed by the state’s Republican-controlled legislature from $3.5 billion to $175 million, and did away with tax cuts for the highest two income brackets entirely."
Related: State Individual Income Tax Rates and Brackets for 2023
‘Why Do I Have to Pay Taxes on That?’ Wrongfully Detained Americans Face Bills, Fines and Fraud Back Home - Louise Radnofsky, Wall Street Journal:
When Washington Post correspondent Jason Rezaian was released from Iran after 544 days of imprisonment, he said his welcome home came with bills of $20,000 for unpaid taxes, late payment penalties and interest.
Rezaian had given his brother power of attorney to manage his affairs while he was abroad—but that power didn’t allow his brother to submit tax returns on his behalf. “There was no pause button for wrongful detention,” Rezaian said. “I was a hostage…Why do I have to pay taxes on that?”
IRS issues ‘last call’ for taxpayers to claim $1.5B in 2019 refunds - Julia Meuller, The Hill. "The deadline to submit a tax return for 2019 and claim the refunds is July 17."
6 tax moves to make this July - Kay Bell, Don't Mess With Taxes. "1. Claim your 2019 tax refund. No, I didn't misread my calendar. But more than 1.5 million taxpayers didn't file a 2019 tax return back in 2020 and missed out on that year's refund. If that's you, you have until July 17 to file that old Form 1040 and claim your tax cash. If you miss the fast-approached due date, Uncle Sam gets to keep their refund."
Committee Urges Congress And IRS To Improve Taxpayer Experience And Upgrade Technology - Kelly Phillips Erb, Forbes. "To help alleviate what are very foreseeable problems, ETAAC proposes the IRS update Form 1099-K and its instructions in advance of the 2023 tax filing season. Specifically, ETAAC recommends that the IRS add codes to the 1099-K to reflect the amount reported as unadjusted gross sales—like the boxes on your Form W-2 to carve out elective deferrals and the like. Examples might include a code for fees paid to online marketplace sales of goods or services or to indicate refunds or reimbursements."
Tax Court Rejects Petition Electronically Filed 11 Seconds After Midnight - Parker Tax Pro Library. "The court found that the taxpayer's time for filing the petition was not extended by Code Sec. 7451 because the taxpayer's problems with filing his petition were unique to him and did not constitute inaccessibility or unavailability to the general public."
IRS Targets Schemes To Claim ERC Employee Retention Credits - Robert Wood, Forbes. "The IRS is well aware of radio, TV and internet ads with alluring claims of free money, $26,000 per employee, with no money down. The IRS has been warning about this scheme since last fall, but the credit claims continue to pour in. The IRS says that some tax professionals are being pressured to claim credits improperly. People and businesses should not filing improper claims."
Related: What to Know About the Employee Retention Credit.
Supreme Chaos - Alex Parker, Things of Caesar. "But the effects on international taxation could also be profound, and devastating to the current global tax system. Almost by definition, international taxation concerns the taxation of income that hasn’t been generated here–a prohibition on that would require lawmakers to reconsider these issues at a very fundamental level."
No Taxation Without Realization? - Renu Zaretsky, TaxVox. "Some background: Prior to 2017, US-based corporations faced a 35 percent tax rate on their overseas income when the earnings were returned, or “repatriated,” to the US. To defer US tax payments, corporations didn’t repatriate, parking trillions of dollars offshore. The Tax Cuts and Jobs Act (TCJA) lowered the corporate tax rate to 21 percent and changed corporate tax from a “worldwide” system to a more “territorial” system common in other developed countries, in which earnings are taxed based on where they’re earned (with some exceptions to prevent tax avoidance). But what about that stockpile of overseas income? The TCJA included a transition: A one-time, mandatory repatriation tax."
Thomas-Crow Affair Highlights ‘No Man’s Land’ in Gift Tax Law - Jonathan Curry, Tax Notes ($):
Robert Lord, a policy adviser with Patriotic Millionaires and a former estate planner, similarly said he couldn’t recall a client having ever asked him about the taxability of an instance of luxury hospitality. “You have to get into fairly exotic stuff before you run into this,” he observed, noting that with the per-donee annual exclusion, bringing two guests along for a vacation doubles the limit to $34,000 before it becomes a reportable gift.
...
“I suspect there are rich people who, over the course of a year, easily could spend more than the $17,000 exclusion amount on someone they’re dating. That seems kind of awkward. And how in the world would you enforce it?” Lord wondered.
You might try to get around it by sending your date a 1099, but that could take some of the magic out of the relationship.
Did Tax Cuts Cause Rising Deficits? - Adam Michel, Liberty Taxed. "However, the recently updated CBO long‐term budget outlook makes clear that the causes of the future budget deficit is not a question of normative judgment. Tax increases cannot fix the underlying growth of health and retirement spending. Even if tax revenues permanently increased to the levels collected when the United States had a budget surplus in 2000, projected deficits would still rise above 9 percent of GDP by 2053. Tax cuts are not to blame for the demographic and benefit‐formula‐fueled growth in mandatory spending."
Details and Analysis of a Tax Reform Plan for Growth and Opportunity - Tax Policy Blog:
Estonia also tops Tax Foundation’s annual ranking of most competitive tax systems, in part because it avoids double-taxing corporate income through taxes at both the entity and shareholder levels.[4] While the tax burden is neutral and simple, Estonia’s income tax system generates substantial revenue comparable to other developed countries.[5] It may sound like an impossible dream to Americans, but it is a dream come true for the more than one million Estonians who have thrived under this regime for the last 22 years.[6]
Drawing on the Estonian experience and building on ideas from our initial study on reform options,[7] we present here a plan for reforming the U.S. tax code that focuses on simplicity.[8] The plan is approximately revenue neutral and consists of two main components that apply to individual and business income, plus offsetting changes to the treatment of estates and capital gains that avoids our current death tax.
The two key reforms:
- "A flat tax of 20 percent on individual income combined with a generous family allowance to protect low-income households...
- A distributed profits tax of 20 percent in lieu of our current overly complex regime for taxing domestic and foreign profits earned by corporations and pass-through businesses.
File under "important ideas destined to be ignored in the coming elections."
Ex-Ill. Legislator's Son Gets 2 Months Prison On Tax Charges - Celeste Bott, Law360 Tax Authority. "The Acevedos were charged as a part of the same probe that has led to Commonwealth Edison paying $200 million and admitting it arranged jobs and other benefits for allies of former Illinois House Speaker Michael Madigan in exchange for him supporting its push to change utility regulation. Madigan has also been charged and faces trial next year, while former ComEd executives and lobbyists were found guilty on all corruption charges in May."
It always looks foolproof until you file your tax returns.
Biscuits with that? It's National Fried Chicken Day!
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