Last August, the US Tax Court issued its decision in Avrahami v. Comm’r of Internal Revenue, No. 17594-13, (T.C. Aug. 21, 2017), the earliest Tax Court opinion involving a micro-captive. A second case has joined its ranks. On June 18, the Tax Court released its ruling in Reserve Mechanical v. Comm’r of Internal Revenue, No.
Read MoreEarly 2018 is LB&I’s Campaign Season
June 4th, 2018
On May 21, 2018, the Large Business and International (LB&I) Division of the IRS released six additional Compliance Campaigns. Initially rolled out in January 2017, LB&I’s Compliance Campaigns are designed as an issue-based approach to address areas of tax that the Service has identified as having a high risk of compliance issues. This determination is
Read MoreCracking Down on Cryptocurrency
May 29th, 2018
While there are many reasons for people to invest in any given financial platform, the attraction of investing in cryptocurrency has long been rooted in the platform’s anonymity, lack of oversight, and inherent decentralization. As such, many investors, relying on the anonymous and unregulated nature of cryptocurrency, have not reported their earnings to the IRS
Read MoreCryptocurrency Creating Taxpayer Conundrums
April 18th, 2018
As the tax season winds to a close, tax practitioners and taxpayers can once again begin the process of looking ahead. However, this tax filing season has left several questions unanswered. In particular, the treatment of certain cryptocurrency transactions have left taxpayers searching for answers without a clear path forward. Generally, the basic tax treatment
Read MoreSpending Bill Makes Major Changes to Captive Insurance Rules
March 27th, 2018
On March 23, the President signed into law H.R. 1625. This legislation, also known as the “Consolidated Appropriations Act, 2018,” provides appropriations for the Federal Government through Sept. 30, 2018. However, H.R. 1625 also retroactively amends IRC § 831(b), by making changes to the diversification requirements imposed by the PATH Act of 2015. The Path
Read More2018 Dirty Dozen Announced, Captive Insurance Remains on the List
March 26th, 2018
On March 19, the Serviced announced 2018’s “Dirty Dozen.” This list, compiled annually, warns taxpayers to stay alert and avoid items that the IRS refers to as “common scams.” Micro-captives, included in the Dirty Dozen under IR-2018-62, appear on this list for the fourth consecutive year. The 2018 Dirty Dozen also includes: frivolous tax arguments,
Read MoreIRS Increases Interest in Bitcoin
March 15th, 2018
Beginning last year, the IRS has been looking at transactions involving cryptocurrency with an increased scrutiny. Taxpayers buying, selling, mining, or exchanging cryptocurrency should be aware of the interest the IRS has shown in the area, and the possible consequences for failing to report taxable gain stemming from its use. The IRS investigation into cryptocurrency
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