Today's Tax Talk with Attorney Steven Leahy

Thursday June 16, 2022 - We just passed the one year anniversary of the ProPublica published the first pieces in a series dubbed "The Secret IRS Files: Inside the Tax Records of the .001%." One year later, we still don't know who leaked this private tax information. 

Is anyone even investigating the breach?  No one will say.  Certainly the IRS won't say - nor with ProPublica.  In fact, ProPublica is still publishing new tax information.

While the IRS is not protecting private tax information, Congress is paving the way for further increases to the IRS budget.  To the tune of $1Billion Dollars.

Attorney Steven A. Leahy reviews the Congressional proposal to increase the IRS budge in light of all of the IRS short comings on Today's Tax Talk.

https://www.realclearpolitics.com/articles/2022/06/15/why_has_the_propublica_investigation_yet_to_see_the_light_of_day_147743.html

https://reason.com/2022/06/03/irs-leak-of-billionaires-tax-data/

https://www.accountingtoday.com/news/house-committee-proposes-1b-funding-boost-for-irs

Tuesday June 14, 2022 - What goes up, must come down.  The old axiom rings true. Look at Bitcoin - the Gorilla of crypto - it was trading at nearly $70,000.00 in November 2021.  Today, Bitcoin went below $21,000 for a short time. It's fallen 25% in the past five days alone, to its lowest value in 18 months.

Crypto has always been volatile - it has weathered several "Crypto Winters" in its short life.  Last month two coins, TerraUSD and cryptocurrency Luna, both of Terraform Labs, dropped to nearly zero in value.  

Terraform Labs has since introduced Luna 2.0. “A chance to rise up anew from the ashes,” said Do Kwon, founder of Terraform Labs.

Attorney Steven A. Leahy takes a look at the ashes of the market to see if the phoenix will rise again on Today's Tax Talk.

https://www.bbc.com/news/technology-61796155

https://www.msn.com/en-us/news/technology/their-cryptocurrencies-crashed-the-market-now-they-e2-80-99re-back-at-it/ar-AAXX7ZH

https://threadreaderapp.com/thread/1536476104986267648.html

Monday June 13, 2022 - The IRS is not too active collecting immediately after tax season.  After all, they have a lot to do. But, come to the end of June, into July, expect the IRS to start contacting you about any unpaid tax, or any questions they might have about matching information returns with tax returns.

IRS Form CP14 is the first in a series of letters the IRS will send you if there is an unpaid balance for the last tax year.  When asked, "What is the notice about?"  The IRS answers, "We sent you this notice because you owe money on unpaid taxes."

If you receive IRS Notice CP14 - read it carefully.  The notice will tell you how much the IRS says you owe, when the IRS expects you to pay, and what to do if you disagree.

If you disagree - contact the IRS right away.  Object!  If the IRS is correct, and you can pay, pay right away to avoid penalties and interest.  

If you can't pay - this Notice is not the last you will hear from the IRS.  There is a series of letters the IRS must send BEFORE they can take anything away from you (Levy).  So, you still have some time to work out an Installment Agreement, or some other remedy with the IRS.

Attorney Steven A. Leahy helps taxpayers who owe the IRS.    So, he has seen IRS Notice CP14 before.

https://www.irs.gov/individuals/understanding-your-cp14-notice

https://www.nbc4i.com/news/local-news/columbus/still-owe-taxes-heres-an-irs-notice-to-watch-for/

https://www.cbsnews.com/news/irs-cp14-notice-taxes-due/

Wednesday June 8, 2022 - United .States Treasury Secretary Janet Yellen appeared at a Senate Hearing on Tuesday and said "The IRS is under siege. It is suffering from huge underinvestment,"

She, again, urged Congress to pass the Build Back Better Bill, or at least that portion that funds the IRS with an additional $80 billion over 10 years.  That legislation would nearly double the IRS Budget and more than double the number of IRS employees.

Approving Treasury's budget request would allow the IRS "to be able to ... make sure that people are paying the taxes that are due.

Attorney Steven A. Leahy reports on this important story on Today's Tax Talk.

https://youtu.be/8sinW9P9Hok?t=7199

https://www.yahoo.com/video/yellen-says-irs-under-siege-184329459.html

Tuesday June 7, 2022 - Legislation was introduced in Congress today that would classify the vast majority of digital assets as commodities, giving regulatory control to the Commodity Futures Trading Commission.

The Bill is presented as the bill as “landmark bipartisan legislation that will create a complete regulatory framework for digital assets that encourages responsible financial innovation, flexibility, transparency and robust consumer protections while integrating digital assets into existing law.”

there are those that believe, "[i]n order for cryptocurrencies to truly expand to their highest possible market reach and for the technology underlying these digital assets to fully provide benefits to global economies, regulation is critical. In order for there to be effective regulation, there must be clearly defined terms and distinctly assigned overseeing bodies"

Attorney Steven A. Leahy reviews the proposed legislation on Today's Tax Talk Crypto-Tuesday edition.

https://www.cnbc.com/2022/06/07/bipartisan-crypto-bill-lummis-and-gillibrand-want-to-empower-cftc-treat-digitals-assets-like-commodities.html

https://www.benzinga.com/markets/cryptocurrency/22/06/27591741/bitcoin-ethereum-and-dozens-of-others-to-be-classified-as-commodities-according-to-new-cry

Monday June 6, 2022 - Where you reside and where you are domiciled are not always the same, and may be VERY important when paying state taxes.

My practice is in Illinois.  Many Illinois residents are fleeing Illinois for greener (and cheaper) pastures.  But, Illinois wants to hang on to these Illinoisans and their tax payments. Simply moving to a new state may not be enough to cut the ties and change your domicile.  

Other states have this same issue.  Attorney Steven A. Leahy reviews the case of O. Gene Bicknell vs. Kansas Department of Revenue and the chance that your chance of being audited just doubled.  Both stories on Today's Tax Talk.

https://www.wsj.com/articles/pizza-hut-tax-battle-bicknell-kansas-florida-change-of-residence-11654290410

https://www.fingerlakes1.com/2022/06/05/if-you-make-over-100000-risk-of-audits-double-as-tax-laws-change-including-the-reporting-of-600-through-cash-apps-to-the-irs/

Wednesday June 1. 2022 - IRS Audits are called "Examinations."  And the IRS conducted 243,715 individual examinations in 2019.  While the numbers have dropped - that is still a lot of audits.

The Chrisley Tax Evasion Trial is good example of what not to do.  Taxpayer's should be aware that an examination can turn into a criminal investigation.  So, you should never lie to an IRS employee.  Also, don’t engage in evasive or obstructionist behavior during an IRS audit.  That can get you in trouble.

Attorney Steven A. Leahy reviews the Chrisley case and then looks at the IRS Examination numbers recently released in the 2021 Internal Revenue Service Data Book on Today's Tax Talk.

https://www.forbes.com/sites/robertwood/2022/06/01/tax-tips-from-chrisley-knows-best-tax-evasion-trial/?sh=313a90f55511

https://www.irs.gov/statistics/soi-tax-stats-irs-data-book

Tuesday May 31, 2022 - The Crypto Crash of recent weeks has put many on alert.  Some have seen this as the demise to Cryptocurrency AND Blockchain technology.  But don't let short term fluctuations sour you to this technology.

Cryptocurrency has been hyped and there is many speculators out there trying to cash in.  The speculation has led to huge swings in the prices of Bitcoin and all the Alt coins.  Unfortunately, the swings have been on the down side recently.

Don't be fooled.  Cryptocurrency AND Blockchain technology is here it stay.  The potential to change how the world operates is still there - and growing stronger by the day.  In many ways, the volitivity is proof of this statement. 

Attorney Steven A. Leahy looks at the latest Crypto and Blockchain news on Today's Tax Talk.

https://opinion.inquirer.net/153497/all-about-blockchain

https://www.analyticsinsight.net/cryptocurrency-projects-that-will-change-the-digital-asset-investment-world-ethereum-eth-solana-sol-and-logarithmic-finance-log/

https://www.ibtimes.com/moneygram-partners-stellar-blockchain-plans-wallet-deal-el-salvador-report-3526108

https://cointelegraph.com/news/tips-to-claim-tax-losses-with-the-us-internal-revenue-service

Thursday May 26, 2022 - The Internal Revenue Service (IRS) Data Book is published annually by the IRS and contains statistical tables and organizational information on a fiscal year basis. The report provides data on collecting the revenue, issuing refunds, enforcing the law, assisting the taxpayer, and the budget and workforce.

The IRS is very good at compiling statistics, and breaking those statistics down into categories.  The 2021 Data Book was released today.  It will take some weeks for me to review all that data.  

Because my practice focuses on helping people with tax problems, the first table I look at is Table 25. Delinquent Collection Activities, Fiscal Years 2020 and 2021.  This chart breaks down the collection numbers.

Attorney Steven A. Leahy looks at the new IRS numbers on Today's Tax Talk.

https://www.irs.gov/statistics/soi-tax-stats-irs-data-book

https://www.washingtonexaminer.com/news/washington-secrets/americans-paying-most-income-taxes-ever

Tuesday May 24, 2022 - Have you noticed - Cryptocurrency is volatile?  Back in 2014 the IRS announced that crypto is property for tax purposes. Not currency, not securities, but property.  So, some tax rules that apply to currency or securities do not apply to cryptocurrency.  

Rules like the Wash Sale Rule.  You can sell your crypto and buy it right back without a 30 day waiting period.  Each trade is a taxable event.

The IRS is still inventing the rules for Cryptocurrency.  The IRS believes that as much as 10% of the Tax Gap (the difference between how much the IRS collects and how much the IRS should collect), or more than $50 billion, is the result of crypto traders avoiding reporting. 

Attorney Steven A. Leahy reports on Cryptocurrency and the IRS on Today's Tax Talk.

https://www.forbes.com/sites/robertwood/2022/05/19/do-crypto-losses-trigger-tax-losses-with-irs/?sh=18dd83e24419

https://www.cnbc.com/2022/05/18/irs-may-be-missing-out-on-50-billion-dollars-a-year-in-unpaid-crypto-taxes.html

https://www.vox.com/recode/2022/5/11/23065956/detectives-crypto-cops-irs-fbi-cyber-bitcoin