Cryptocurrency Voluntary Disclosure IRS
Cryptocurrency Voluntary Disclosure
Cryptocurrency Voluntary Disclosure: When it comes to the taxation of Bitcoin/Cryptocurrency, there is mass confusion in the marketplace. This is primarily due to the fact that there are many stones left unturned by the IRS, FinCEN, and foreign tax jurisdictions etc. when it comes to deciphering cryptocurrency. The updated procedures are a great deal for non-compliant Taxpayers. The New IRS Voluntary Disclosure procedures were updated in 2019, at the close of OVDP. The IRS Voluntary Disclosure Program (VDP) allows U.S. Taxpayers to report domestic & offshore income, accounts and assets, and/or unreported domestic income. In recent years, the IRS has taken an aggressive position regarding foreign accounts compliance.
Moreover, FBAR penalties can be substantially worse if a person is under FBAR Audit instead of voluntarily disclosing under the program.
The goal of IRS Voluntary Disclosure is to avoid a criminal tax investigation. If a person can qualify as non-willful, they may qualify for the streamlined filing compliance as well.
What is Voluntary Disclosure
The IRS Voluntary Program can be a great benefit to taxpayers who may be considered “willful” by the IRS — or are simply uncomfortable with certifying under penalty of perjury that they are non-willful. In some cases, VDP will still be a preferred method to the Streamlined Procedures for non-willful taxpayers.
The main requirement is that the money cannot be from Illegal Sources.
Updated Voluntary Disclosure Program Procedures
Under the new voluntary disclosure program, the Internal Revenue Service combined Offshore Voluntary Disclosure with Domestic Voluntary Disclosure into one program. The penalty structures have also been revised (for better, and for worse).
Our Tax Specialist team can get you into IRS Compliance for U.S & Offshore Assets & Income.
Offshore Accounts, Assets & Income
The IRS has developed several Offshore Voluntary Disclosure tax amnesty compliance programs to allow Taxpayers to report and disclose unreported offshore accounts and income.
U.S. Income Reporting
This article focuses on Offshore Voluntary Disclosure. If you are seeking to learn about the U.S., Non-Offshore Voluntary Disclosure Practice for U.S. Income, we have a separate article detailing the Domestic Voluntary Disclosure.
We want to help you bring understanding and clarity to this often confused (and highly specialized) area of tax law.
Why Must Money be from Legal Sources?
The reason the money must be from legal sources is simple: If the money was from illegal sources, then by entering the IRS Voluntary Disclosure, you would be “cleaning dirty money,” and the IRS would be serving as the launderer…
Want to use the IRS to Launder Foreign Money…Think Again.
When is Criminal Prosecution Recommended?
If the IRS catches you committing a tax crime, chances are they will investigate.
The IRS is not selective when it comes to enforcement. Movie Stars, Musicians, Moguls, Politicians are all fair game when it comes to IRS criminal prosecutions. The general rule is that if you are out of IRS compliance for more than two (2) years, your civil violation(s) could turn criminal.
Moreover, situations that will greatly heighten your chances of getting caught, include:
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure.
Contact our firm today for assistance.