Today's Tax Talk with Attorney Steven Leahy

Thursday December 8, 2022 – FTX is in bankruptcy.  If a taxpayer has losses from their investment in FTX these “customers will face a nightmare when they file their income tax returns next year.” 

Much may depend on whether Sam Bankman-Fried is charged with a crime.  Because a criminal proceeding might trigger special IRS rules for Ponzi scheme investment losses, allowing for immediate deductions. Otherwise, these taxpayers might have to wait for IRS guidance or court judgments.  That may take years.

Attorney Steven A. Leahy unleashes on the FTX scandal and the effect on taxpayers. on Today’s Tax Talk. 

https://www.foxbusiness.com/money/ftx-customers-irs-ponzi-rules-loom-large

https://www.irs.gov/pub/irs-drop/rr-09-09.pdf

https://www.irs.gov/pub/irs-drop/rp-09-20.pdf

Wednesday December 7, 2022 – I have been shouting from the roof tops about the $600 limit for 1099K reporting   I have even predicted that, once taxpayers are faced with this monstrosity, Congress would take action to reverse it.

Well, today a Democratic Congressman, from Illinois no less, Raja Krishnamoorthi, sponsored legislation to “radically increase the threshold” from $600.00.

The IRS has been on a propaganda campaign to alert taxpayers that this new rule is coming…and coming soon.

Remember, the Affordable Care Act originally included a provision that required businesses to report every purchase from a single vendor over $600. That provision was quickly repealed – Before it went into effect. At the time, IRS Taxpayer Advocate Nina Olson, reported that costs to businesses would drastically outweigh the expected revenue ($19 billion over 10 years).

Attorney Steven A. Leahy does not take too many bows for the accurate prediction in Today’s Tax Talk.

https://rollcall.com/2022/03/15/democrats-push-to-loosen-gig-worker-tax-reporting-threshold/

https://www.foxnews.com/video/6316677404112

https://www.msn.com/en-us/news/opinion/team-biden-is-using-the-irs-to-attack-the-gig-economy/ar-AA14Wqna

Crypto-Tuesday, December 6, 2022 - With the falling price of Cryptocurrencies there is talk that some new rules, due to take effect in 2023, may be postponed.  Specifically, the new rule requiring crypto exchanges and brokerages to report customer information directly with the IRS.

Another result of falling Crypto prices is the ability of investors for tax loss harvesting.  “[T]ax-loss harvesting is a long-established planning strategy when it comes to stocks, bonds and other conventional investments. It typically comes into focus at the end of a year.”

Attorney Steven A. Leahy addresses these issues on Today’s Tax Talk.

https://www.axios.com/2022/12/05/the-irs-is-coming-for-crypto-but-its-complicated

https://www.marketwatch.com/story/cryptocurrency-investor-losses-are-being-turned-into-irs-gains-heres-how-theyre-doing-it-11670345179

Thursday December 1, 2022 - Inflation has an impact most don't notice.  Inflation exasperates IRS problems.  How?  The IRS charges interest on all past due balances – and the interest is compounded DAILY.  Yes, daily.  That means, today taxpayers pay interest on interest from yesterday. 

Last year at this time the IRS interest rate was 3%.  The IRS just announced that the interest rate for the next quarter is 7%. More than double from last year.

Attorney Steven A. Leahy will explain how the increase in interest rates will effect real people.

https://www.thinkadvisor.com/2022/11/29/irs-to-hike-interest-rates-for-q1/

https://www.irs.gov/payments/quarterly-interest-rates#prior

Wednesday November 30, 2022 – Yesterday, Ye (formally Kenya West) appeared on Tim Pool’s PodCast.  On that show, Ye told the world "But I found out — OK, so they froze, they put a $75 million hold on four of my accounts. And then they said you owe a lot of taxes. Took me, like, six hours to find out how much 'a lot' was. They said, well, around $50 million."

He also claimed they were trying to put him in prison for tax evasion.  Ye believes there are powers working against him.  He believes the powers are Jewish.  His beliefs have cost him many of his sponsors.  Gap, Adidas and others.

Attorney Steven A. Leahy reports on Ye’s IRS troubles on Today’s Tax Talk.

https://nypost.com/2022/11/29/kanye-west-said-irs-froze-his-accounts-because-he-owes-50m-in-taxes/

https://www.yahoo.com/entertainment/kanye-west-said-irs-put-055859593.html

https://www.vibe.com/news/entertainment/kanye-west-walks-out-interview-1234714925/

https://www.usmagazine.com/celebrity-news/news/kanye-west-irs-froze-my-accounts-due-to-millions-in-owed-taxes/

Crypto Tuesday November 29, 2022 - The IRS will spend $80 Billion, mostly on collections.  Part of the collection plan includes expanding the IRS Criminal Investigation Unit.  And the Criminal Investigation Unit is focused on Crypto for 2023.

We all know the US Government has put crypto in their crosshairs.  Beginning in 2016 the IRS has been exposing taxpayers who failed to report their taxable gains from cryptocurrency transactions by issuing John Doe summonses to crypto exchanges and dealers. The IRS does not target the exchanges or dealers with a John Doe Summons, instead the IRS targets the information of their customers.  So, keep a close look on the IRS efforts to target you if you are into Crypto.  

Attorney Steven A. Leahy investigates the Criminal Investigation Unit of the IRS on Today's Tax Talk.

https://www.nationalreview.com/2022/11/the-irs-is-coming-for-cryptocurrency/

https://www.jdsupra.com/legalnews/irs-s-crypto-john-doe-summons-expanded-2625612/

Monday November 28m 2022 - Well, the IRS is now WARNING taxpayers about 1099-Ks.  Something this channel has been warning about from the beginning of this idea of the Cash App information return requirements found int he American Rescue Plan of 2021.

The reason there for the warning?  Many taxpayers will be very surprised this next tax searson.  They will receive 1099-K(s) and they will not know what to do with it.  They see the trouble brewing.

Attorney Steven A. Leahy reveals the IRS Plans for Business Owners in Today's Tax Talk.

https://www.irs.gov/newsroom/get-ready-now-to-file-your-2022-federal-income-tax-return

https://www.marketwatch.com/story/irs-warns-americans-over-600-threshold-to-report-venmo-paypal-payments-11669480433

https://www.businessinsider.com/side-hustlers-not-reporting-earnings-at-risk-of-irs-audit-2022-11

Wednesday November 23, 2022 – There is some disturbing news about your most private data – your tax data.  It appears that some of the top tax preparation software companies have been sharing taxpayer data with Big Tech Companies. Major tax filing services such as H&R Block, TaxAct, and TaxSlayer have been sharing date secretly with companies like Facebook and Google.

Not only would this be a gross violation of their customers’ trust – it could be a violation of the law.  The companies involved here are claiming this was all inadvertent.  “We did NOT know and were never notified that personal tax information was being collected by Facebook from the Pixel,” said a vendor of TaxSlayer.

It can be unsettling to learn these large organizations are working together to violate taxpayers’ privacy rights. 

Attorney Steven A. Leahy exposes these practices on Today’s Tax Talk.

https://www.theverge.com/2022/11/22/23471842/facebook-hr-block-taxact-taxslayer-info-sharing

https://www.cnbc.com/2022/11/22/popular-tax-prep-software-sent-financial-information-to-meta-report.html

Tuesday November 22, 2022 - It is Crypto-Tuesday - Today we revisit El Salvador.  It was just about a year ago, September 2021, that the El Salvador government adopted bitcoin as legal tender along with U.S. dollars.  

This experiment has not turned out as anticipated.  In September 2021 Bitcoin was trading at around $45,000.00.  Two months later, BitCoin was trading above $69,000.00. 

 Today, Bitcoin is trading at around $16,000.00.

Rather than back off, Nayib Bukele, the President of El Salvador, announced that El Salvador will continue to buy - at 1 Bitcoin per day.

Attorney Steven A. Leahy

Monday November 21, 2022 - The inflation Reduction Act of 2022 provided $80 Billion to the IRS primarily to increase collection efforts and improve information technology.  That $80 Billion could fund 87,000 new IRS Employees.  Or so says report released by the Treasury Department.

The IRS currently has 78,000 employees.  This doubling of the IRS has caused much concern to business owners across the country.  Remember, not one Republican voted for the Inflation Reduction Act – it was passed on a purely partisan vote.

Now that the GOP will control the house, the incoming Speaker, Kevin McCarthy, and other GOP leaders are promising to reverse that spending Plan.

“On day one, in this House, we will repeal 87,000 IRS agents,” said the incoming speaker. “We will use the power of the purse – the size of our debt has to stop.”

Attorney Steven A. Leahy looks over the GOP plan on Today’s Tax Talk.

https://www.fa-mag.com/news/house-republicans-vow-to-immediately-repeal-funding-for-87-000-irs-agents-70697.html

https://www.bostonherald.com/2022/11/21/elizabeth-warren-jeanne-shaheen-urge-irs-to-investigate-turbotax/