The IRS’s specialist compliance teams revealed recently that they have significantly increased their focus on virtual currency tax issues during the 2020 fiscal year.
The newly published Criminal Investigation (CI) division’s annual report highlights the agency’s successes and criminal enforcement actions taken in fiscal 2020, the majority of which occurred during the COVID-19 pandemic. During the 2020 fiscal year, over USD10bn was identified as tied to tax fraud and other financial crimes, the report revealed.
The report showed that the key focuses of CI in fiscal year 2020 included COVID-19-related fraud, cybercrimes, with an emphasis on virtual and cryptocurrencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud, and tax-related identity theft.
In response to COVID-19 related crimes, CI special agents quickly adapted their investigative techniques to initiate cases into fraudulent claims for Economic Impact Payments, Paycheck Protection Program loans, and refundable … Read More »
In the United States, the American Institute of CPAs and the Council on State Taxation have urged Congress to pass legislation to simplify state tax rules for remote and mobile workers.
In a joint letter to congressional leaders, dated August 27, 2020, AICPA and COST said lawmakers should focus on the Remote and Mobile Worker Relief Act of 2020, and a particular section of the American Workers, Families and Employers Assistance Act, in any final COVID-19 relief package.
Under current law, non-resident employees who visit a state for as little as 24 hours to do work can be subject to certain state income tax laws. Businesses must also comply with states’ varying withholding requirements with regards to employees who travel out of state for work purposes.
However, under the Remote and Mobile Worker Relief Act 2020, introduced in the Senate on June 18, … Read More »
In the United States, while all eyes are on the forthcoming Presidential election, behind the bluster and bombast there are attempts to keep the business of doing business running smoothly, with the US Chamber of Commerce joining calls for the Treasury Department to issue clear guidance on the recently announced payroll tax deferral.
Earlier this month, President Trump signed an executive order requiring Treasury to defer the collection and payment of employee payroll taxes for the period September 1, 2020, until December 31, 2020. The deferral is available to employees whose wages or compensation was less than USD4,000 during any bi-weekly pay period, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods.
Trump signed the order, bypassing Congress, after talks between Republicans and Democrats on a new COVID-19 tax bill stalled. Trump said in comments alongside … Read More »
The US Internal Revenue Service has reminded overseas taxpayers living and working abroad that they have an extra month to file their 2019 federal income tax return and pay any tax due. This includes Americans who live and work abroad, non-resident aliens and foreign entities with a US filing and payment requirement.
The deadline for these taxpayers is normally June 15. However, it has been extended to July 15 as part of the various COVID-19-related tax relief measures announced by the Treasury Department and the IRS in April 2020.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look
Finland has been looking broadly at measures to increase the country’s tax take post-COVID, and at ways to increase compliance in a number of areas.
Earlier this month, for example, the Finnish Government published a report which explores the economic and fiscal consequences of the COVID-19 pandemic for Finland and considers what taxes could be increased to help restore the public finances.
The report observes that Finland already has one of the highest tax burdens in the world, especially on labor. Therefore, raising taxation poses the risk of damaging Finland’s competitiveness, it warns, but goes on to identify certain tax areas in which there is scope for revenue increases without threatening the economy.
These, according to the report, are: property taxes (which tend not to be economically distortive and affect largely wealthier taxpayers); corporate tax (where there is scope available to reduce the … Read More »
In late November, the US IRS announced that the Foreign Account Tax Compliance Act (FATCA) International Data Exchange Service (IDES) would be opening for testing in December.
FATCA, which was enacted by the US Congress in 2010 and took effect on July 1, 2014, is intended to ensure that the IRS obtains information on financial accounts held at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.
US persons are also required to report, depending on the value, their foreign financial accounts and foreign assets.
The FATCA IDES is an electronic delivery point where financial institutions and host country tax authorities can securely transmit and exchange FATCA data with the United States. The data is in a standard XML … Read More »
The House of Representatives has approved bipartisan legislation that would require certain new and existing small corporations and limited liability companies to disclose information about their beneficial owners.
The bill, known as the Corporate Transparency Act of 2019, was sponsored by Carolyn B. Maloney (D-NY) and co-sponsored by Peter King (R-NY) and Tom Malinowski (D-NJ).
Under the proposed legislation, certain entities applying to form a corporation or limited liability company would have to file beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN). Additionally, certain existing corporations and limited liability companies would have to file this information with FinCEN two years after the implementation of final regulations required under the bill.
The bill defines a beneficial owner as an individual who:
exercises substantial control over a corporation or limited liability company;
owns 25 percent or more of the interest in a corporation or limited … Read More »
It’s not been a good time for taxpayers in many jurisdictions lately. India, for example, is infamous for its complex tax rules and capricious tax inspectors. It’s just the sort of place where you need a neutral authority standing in between taxpayers and the tax man to arbitrate disputes. Like an ombudsman. Except that the Indian Government has just decided to abolish its income tax ombudsmen service. Oh dear.
Apparently, according to the government, the ombudsman service is being shut down because it hasn’t achieved its objectives, and because taxpayers are increasingly turning to alternative forms of dispute resolution mechanism. That the ombudsman’s office has been effectively squeezed out by the competition probably tells you all you need to know about India’s tax system. Dispute resolution must be a lucrative market indeed!
For more information on this, and other topical international tax … Read More »
There’s unlikely to be any shortage of work for tax advisers in the United States. The way events have conspired, 2019 could go down in history as one of the most challenging tax seasons ever, if not the most challenging. Certainly, the ingredients for this are in place: substantially revised US tax rules, which taxpayers will be filing under for the first time this year; and an Internal Revenue Service only just getting back on its feet after the longest government shutdown in history. An IRS, I might add, that struggles to cope with its bloated remit with 76,000 staff, let alone a skeleton crew. A recipe for disaster, you might say. An administrative perfect storm.
Recently, the IRS has sounded like it resembles one of those tax robots I keep warning you all about. As noted by the American Institute … Read More »
Banks and financial institutions the world over were worried about the legal and reputational costs of falling foul of FATCA (the United States Foreign Account Tax Compliance Act) from the outset. However, what if an entire country ends up missing a FATCA deadline? And this is no mere hypothetical question either. It’s happened. Recently it emerged that the Caribbean territory of Saint Vincent and the Grenadines has requested a 60-day extension from the reporting deadlines under FATCA.
So what will happen? Will SVG now be hauled over the coals by the United States Department of Justice and the Internal Revenue Service? I doubt that, but we’ll have to wait and see. I think it’s probably the territory’s financial institutions that are sweating the most.
Then again, things have gone remarkably quiet on the FATCA front. Successful FATCA-related prosecutions have been very few … Read More »