Betsy Smith

IRS Issues Guidance on Non-Fungible Tokens – What It Says and Does Not Say

By Betsy Smith, Nicholas C. Mowbray, Robert A. Musiala and Teresa Goody Guillén on March 27, 2023 Posted in Alert

The Proposed Guidance and Implications The IRS and Treasury Department announced on March 21, 2023, that they intend to issue guidance providing that certain NFTs qualify as collectibles under Section 408(m) of the Code. The Notice is the first guidance issued by the IRS addressing the U.S. federal income tax treatment of NFTs. The IRS … Continue Reading

IRS Warns: Hundreds of Crypto Criminal Tax Cases Coming Soon; Hiring of 300 Special Agents Means More to Follow

By Scott Danielson, Christina Gotsis, Carlos Ortiz, Veronica Reynolds, Betsy Smith and Kayley Sullivan on November 16, 2022 Posted in Alert

The 2022 annual report from the IRS Criminal Investigations (CI) division (the Report) demonstrates an impressive year for enforcement, particularly with regard to cryptocurrency. Following the publication, CI Chief Jim Lee made clear that the division will continue to closely scrutinize crypto transactions. He warned: “Expect more outward-facing tax crypto cases here in the near … Continue Reading

The Tax Man Isn’t Leaving: The IRS Continues to Issue John Doe Summonses Relating to Virtual Currency Transactions

By Carlos Ortiz, Betsy Smith, Nicholas C. Mowbray, Christina Gotsis and Kayley Sullivan on October 3, 2022 Posted in Tax

On Sept. 23, 2022, a U.S. District Court judge approved an IRS John Doe summons served on a New York-based bank seeking account records, including account opening documents and records of deposits, withdrawals, transfers and wires, of clients who used sFOX for cryptocurrency services. The summons was issued in connection with partnered services the bank … Continue Reading

Cryptocurrency Tax Enforcement May Soon Reward Tipsters Through Whistleblower Program and False Claims Act

By Carlos Ortiz, Nicholas C. Mowbray, Betsy Smith, Christina Gotsis and Kayley Sullivan on May 24, 2022 Posted in Blockchain

International and state authorities could soon bolster enforcement efforts by rewarding individuals who provide information about underreporting income on virtual currency transactions. As a result, digital asset investors and their tax advisors could find themselves subject to liability under yet another regulation creeping into cryptocurrency governance. Taxpayers who skirt tax payments on virtual investments could … Continue Reading

Global Tax Enforcement Group Provides NFT Red Flag Guidance

By Teresa Goody Guillén, Christina Gotsis, Nicholas C. Mowbray, Betsy Smith and Carlos Ortiz on May 3, 2022 Posted in NFT

Answering the call for guidance regarding potential issues concerning the popular cryptocurrency assets NFTs, on April 28, the J5 issued a first-of-its-kind intelligence bulletin warning the public of the dangers of dealing with NFTs. Titled the “J5 NFT Marketplace Red Flag Indicators,” the bulletin provides real-world guidance to banks, law enforcement partners and private investigators … Continue Reading

Alert: IRS Issues New Guidance and FAQs on Virtual Currencies

By Nicholas C. Mowbray, Robert A. Musiala, Betsy Smith, Laura E. Jehl and Brian Davis on October 10, 2019 Posted in Cryptocurrency

On Oct. 9, the Internal Revenue Service (IRS) issued additional guidance regarding the taxation of cryptocurrency. The guidance comes more than five years after the IRS issued Notice 2014-21, the first and, until now, only official guidance regarding cryptocurrency. Revenue Ruling 2019-24 (the Revenue Ruling) reaffirms that virtual currency is treated as property and does … Continue Reading