Taxes and Crypto: Five Things You Need to Know

For many, 2021 marked their first year—and now first tax season—in cryptocurrency. WSJ tax columnist Laura Saunders breaks down how to navigate reporting digital assets to the IRS.

IRS Delays FATCA to Help Banks, But Offshore Account Disclosures Continue

From Forbes –

“The Treasury Department is delaying part of FATCA, the Foreign Account Tax Compliance Act. Foreign banks get more time before they start handing over data about their U.S.-owned accounts to the IRS. Like Obamacare, FATCA was passed in 2010, and like Obamacare, it has staggered effective dates. Non-U.S. banks around the world must reveal American account details or risk big penalties.

Much of the 2010 law took effect in 2015, but it is still being rolled out. The big penalties on offshore banks who do not hand over Americans are withholding at 30% on most transactions. There has already been some withholding, but not in a big way. Now, the U.S. is pushing back the start of withholding for many types of transactions from 2017 until 2019. Banks worldwide are happy because they can get ready. Banks will try to avoid withholding whenever possible, and that will mean more pushing on account holders.”


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IRS: Hack Much Wider Than First Thought

From Bank Info Security –

“The Internal Revenue Service says cyber thieves may have accessed as many as 334,000 taxpayer accounts in a breach of its Get Transcript system, far more than the 114,000 accounts it originally estimated in May.

The Get Transcript online service, suspended in May, is aimed at simplifying the process taxpayers use to retrieve their tax records. It enables taxpayers to review their tax account transactions, line-by-line tax return information or wage and income reported to the IRS for a specific tax year. By circumventing Get Transcript's authentication protections, hackers are believed to have gained access to this taxpayer information, including Social Security numbers.”

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Think FATCA Requirements Only Apply to Foreign Entities? Think Again

From Think Advisor –

“The Foreign Account Tax Compliance Act (FATCA) is generally associated with reporting requirements for foreign banks and foreign entities to disclose the names of U.S. individuals using such foreign vehicles to hide U.S. financial accounts. (See all three blog posts in this series on FATCA compliance.)

However, there is an important FATCA reporting requirement, the Statement of Specified Foreign Financial Assets, Form 8938, that affects U.S. individuals and certain U.S. entities that own foreign financial assets.

Failure to timely submit this form may lead to significant penalties and could open up the possibility of an IRS audit.”

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