Are Federal Agencies Killing Crypto In US?

March 8, 2023 by admin

Crypto-Tuesday March 7. 2023 – Cryptocurrency has emerged as a popular form of investment and a means of trade. The US government has been increasingly cracking down on the use of cryptocurrencies, with various agencies taking steps to curb their use.

Today we will explore how US agencies are killing cryptocurrency in the US and the impact it may have on the future of digital currencies.

One of the most significant moves against cryptocurrencies in the US was made by the Internal Revenue Service (IRS) in 2014. The IRS declared that cryptocurrencies should be treated as property for tax purposes, which meant that any gains from the sale of cryptocurrencies would be subject to capital gains tax.

This was a major blow to cryptocurrency investors, who had previously enjoyed tax-free gains from their investments. The decision by the IRS to tax cryptocurrencies has made it more difficult and costly for individuals to trade in digital currencies.

The Securities and Exchange Commission (SEC), under Chairman Gensler, has taken legal action against cryptocurrency companies. Going so far as to say that “everything but Bitcoin” should be considered a security and regulated as such.

The ongoing legal battle between the SEC and Ripple may decide the fate of the entire crypto industry and whether many cryptocurrencies survive. Ripple CEO Brad Garlinghouse has said Crypto companies have “already started moving outside” the US to avoid the heavy hand of the SEC.

More recently, the US Treasury Secretary, Janet Yellen, said it was “critical to put in place a strong regulatory framework.“ While she stopped short of calling for a ban on Cryptocurrencies, there have been very powerful forces stating that banning crypto should be an option.

And today, Federal Reserve Chairman Jerome Powell, restated his heavy warnings to banks that the Federal Reserve are watching their Cryptocurrency moves closely. Saying, “We see in crypto activity lots of things that suggest that regulated financial institutions should be quite cautious in doing things in the crypto space.”

Some experts believe that cryptocurrencies will continue to thrive despite the increased scrutiny, while others believe that they will struggle to gain widespread adoption if they are subject to onerous regulations. In any case, the US government’s increased scrutiny of cryptocurrencies has had a significant impact on the industry.

The tax treatment of cryptocurrencies, along with proposed regulations from a host of United States Government Regulatory Agencies, including, the IRS, the SEC, the Department of Treasury, the Federal Reserve Board, and others, have made it more difficult and costly for individuals to trade in digital currencies. While some argue that this regulatory crackdown is necessary to prevent illicit activities, others worry that it will stifle innovation and prevent the growth of this possibly freedom enhancing technology.

Attorney Steven A. Leahy looks at the regulatory landscape in this Crypto-Tuesday episode of Today’s Tax Talk.

https://coinflip.tech/markets

https://cointelegraph.com/news/u-s-treasury-janet-yellen-calls-for-strong-regulatory-framework-for-crypto-activities

https://www.coindesk.com/policy/2023/03/07/federal-reserves-powell-we-dont-want-to-strangle-crypto-innovation-but-sector-is-a-mess/

https://www.thestreet.com/crypto/news/ripple-ceo-crypto-will-go-overseas-due-to-sec-regulations

https://www.nasdaq.com/articles/secs-gensler-warns-crypto-investors-but-differentiates-bitcoin

Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

Taxing The Treasure Trove

March 3, 2023 by admin

Thursday March 2, 2023 – As a tax attorney, I am always interested in the unusual. Like the tax implications of catching a record-setting baseball. Or finding a shipwreck with $800 million worth of whiskey.

In 2010, a man named Ross Richardson discovered a the wreak of a passenger ship named the Westmoreland which sank in northern Lake Michigan in 1854. Along with gold valued at about $20 million, the ship contained about 280 barrels of whiskey each contain 200 bottles.

The IRS refers to these items as “Treasure Troves.” A treasure trove is typically defined as a hidden or concealed collection of valuable items that has been discovered by chance. These items are usually old or antique and have been hidden away for a significant amount of time. In some cases, treasure troves may be discovered on a property or in a building that the finder does not own. In other cases, the finder may have been actively searching for treasure using metal detectors or other means.

From a tax perspective, the discovery of a treasure trove can have several different implications. If the finder is not the legal owner of the property where the treasure trove was discovered, they may be required to pay a finder’s fee or royalty to the property owner. This fee may be subject to income tax, depending on the specific circumstances of the discovery.

If the finder is the legal owner of the property where the treasure trove was discovered, the tax implications may be different. In general, treasure troves are considered taxable income under the Internal Revenue Code. This means that the finder may be required to pay income tax on the value of the treasure trove.

The specific tax rate will depend on the finder’s income bracket and the value of the treasure trove. It is important to note that if the finder intends to sell the treasure trove, they will also be required to pay capital gains tax on any profits made from the sale.

As a tax attorney, my advice to anyone who discovers a treasure trove is to consult with a tax professional as soon as possible. Do NOT follow the old adage “Shoot, Shovel, and Shut Up.”

Attorney Steven A. Leahy explores the depths of the Treasure Trove Tax on Today’s Tax Talk.

https://nowthisnews.com/news/whiskey-recovered-from-a-170-year-old-shipwreck-could-be-worth-a-fortune

https://www.forbes.com/sites/robertwood/2023/03/01/shipwrecked-whiskey-worth-871-million-irs-tax/?sh=4ecae39f2f0c

Supreme Court Rights A Wrong

March 2, 2023 by admin

Wednesday March 1, 2023 – Back in January we did a story about The Supreme Court refusing to hear a case of excessive fines for inadvertently failing to file a timely bank disclosure form called the FBAR (Report of Foreign Bank and Financial Accounts).

Justice Gorsuch issued a rare dissenting opinion in that case. And now it makes sense. On Tuesday, the United States Supreme Court limited the IRS’s ability to impose penalties when taxpayers unintentionally make errors in reporting foreign accounts. The majority opinion was written by Justice Neil M. Gorsuch. He reasoned that the relevant legal duty is to file reports, not individual accounts.

The case concerned Alexandru Bittner, an immigrant and dual citizen who failed to disclose his foreign accounts while living overseas. Lawyers argued that the FBAR should only carry a fine of $50,000, or $10,000 per year. Not the nearly $3 million penalty initially imposed by the IRS, based on the number of accounts.

Justice Amy Coney Barrett disagreed and wrote a dissent arguing that the FBAR is an annual form requiring separate penalties for each account not reported. The ruling is important news for taxpayers who worry about FBAR penalties and adds clarity to the IRS’s authority when it comes to FBAR violations. With this ruling, SCOTUS has ensured that taxpayers will not be unfairly penalized by the IRS for unintentional FBAR mistakes. That’s a win for everyone. Thank you SCOTUS! God bless America! Now, how can we go back to the Toch case and correct that wrong?

Attorney Steven A. Leahy analyses this recent Supreme Court decision on Today’s Tax Talk.

https://www.washingtontimes.com/news/2023/feb/28/supreme-court-sides-immigrant-challenging-irs-pena/

https://www.supremecourt.gov/opinions/22pdf/21-1195_h3ci.pdf

https://vimeo.com/manage/videos/793168156

https://www.supremecourt.gov/opinions/22pdf/22-177_d0fi.pdf

Has SEC’s Gensler Decided Against Crypto?

March 1, 2023 by admin

Crypto-Tuesday February 28, 2023 – Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC), has come out with a statement that all digital assets, besides bitcoin, are securities. But according to various lawyers, his opinion cannot be taken as law without the SEC having to prove its case in court for each individual token, a process which would be incredibly timely and expensive.

Gabriel Shapiro from the Delphi Labs outlined that it would take 12,305 lawsuits for this to happen, making it unfeasible for most token creators. He also noted that registration is not feasible as there is no clear path for it. Overall, this statement has sparked fear in the industry as to what the SEC’s plan for crypto.

That said, it is important to note that Gensler’s opinion should not be taken as the final legal determination – although powerful. Ultimately, judicial decisions determine what the law means and how it applies.

In conclusion, Gensler’s comments are something to be feared, as his opinion could have a dramatic impact on how things are regulated. Remember, Gensler has been asked to recuse himself in crypto enforcement cases because of his clearly bias statements.

Attorney Steven A. Leahy reviews the current SEC vs Crypto standings on Today’s Tax Talk.

https://coinflip.tech/markets

https://cointelegraph.com/news/crypto-lawyers-flame-gensler-over-claims-that-all-crypto-are-securities

https://cryptoslate.com/ripple-asks-sec-chair-to-recuse-self-from-crypto-enforcement-cases/

IRS Missed Deadline

February 28, 2023 by admin

Monday February 27, 2023 – Remember that February 17, 2023 deadline Treasury Secretary Janet Yellen set for The Internal Revenue Service (IRS) to create a strategic plan for spending the $80 billion Congress handed them? Yeah, neither does the IRS.

The February deadline came and went and the IRS simply did not meet the deadline. The IRS has excuses: former Commissioner Charles Rettig’s term expired, there is a confirmation process for the subsequent nominee Daniel Werfel, and a friend came in from out of town. Treasury has been working with the IRS to develop a plan since last summer.

This delay raises questions about the agency’s credibility and casts doubt on its ability to efficiently spend the money. While the document is still in progress, taxpayers should expect revisions as needs change. But don’t worry. The IRS will complete it in good time- now get back to doing your return. There is a deadline you know!

Attorney Steven A. Leahy looks at the latest IRS arrogance on Today’s Tax Talk.

https://www.washingtonexaminer.com/restoring-america/faith-freedom-self-reliance/negligent-irs-gets-80-billion-but-misses-deadline-for-the-money

https://www.forbes.com/sites/howardgleckman/2023/02/22/the-irs-misses-its-deadline-for-completing-a-plan-to-spend-80-billion-in-new-money/?sh=7691e7031c2f