International Data Sharing with the IRS

In a recent news release, the IRS announced the opening of a new International Data Exchange Service (IDES) for financial institutions and foreign countries to securely provide information on financial accounts held by U.S. persons. More than 145,000 financial institutions have registered and more than 110 countries have agreed to provide this information to the IRS.

This announcement marks another step in the IRS’ attempts to tax previously “hidden” offshore accounts. (U.S. taxpayers with over $10,000 in foreign accounts are required to file an annual foreign bank account report (FBAR) and report worldwide income.)

The IRS currently has in place an offshore voluntary disclosure initiative (OVDI), which provides incentives for U.S. taxpayers with unreported foreign income to disclose.  The OVDI offers reduced penalties — […]

Possible FBAR Reporting for Bitcoin Users

The IRS has issued guidance in the form of Notice 2014-21 that virtual currencies such as Bitcoin will be treated as property. The sale or exchange of virtual currency or the use of virtual currency to pay for goods or services may result in a tax liability. Uncertainties continue, however, regarding the future regulation of these currencies and possible FBAR filing requirements. While the IRS has stated that there is no FBAR filing requirement for virtual currency holdings for the 2013 filing season, it seems likely that a future filing requirement will come to pass. Taxpayers using virtual currencies should be aware of this likelihood. Read more

By |September 23rd, 2014|Categories: Business Operations, Business Tax, Individual Tax|Tags: , , , , |Comments Off on Possible FBAR Reporting for Bitcoin Users
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