Category

Tax

Category

Washington based think tank Coin Center has brought a lawsuit against, among others, the United Sates Treasury Department and Internal Revenue Service regarding a reporting requirement included in last year’s major infrastructure legislation. We wrote at that time about the criticism of the bill with respect to the reporting burdens that were going to be placed on “brokers” of “digital asset” transfers. The Coin Center lawsuit focuses on the so-called Section 6050I reporting requirement, which…

On May 16, 2022, the Australian Tax Office issued a publication that identified four key focus areas for the 2021-22 tax year. These four are areas where the ATO says they see people making mistakes. One of the areas is capital gains from crypto assets. The ATO plans to ensure that there is an appropriate level of scrutiny on correct reporting of deductions and income for the priority areas. The ATO warned that taxpayers who…

On April 25, 2022, European Central Bank Executive Board member Fabio Panetta delivered a speech at Columbia University in New York in which he was very critical of cryptoassets. As indicated in the title of the speech — “For a Few Cryptos More: the Wild West of Crypto Finance” — Mr. Panetta compared cryptocurrencies to the Wild West gold rush in the United States in the second half of the 19th century (while also working…

It was big news when the U.S. Senate recently passed the $1 trillion infrastructure bill. One aspect of that bill was a revenue raising provision aimed at the cryptocurrency industry. In an article that was just published in Bloomberg’s Tax Management Memorandum, we look at the nuts and bolts of that provision, and take a deeper dive into the criticism of the bill by the cryptocurrency community, as well as the failed attempt to modify the bill…

If you happened to prepare your own tax return this year or at least looked at the top of the first page, you might have noticed that the IRS has literally moved cryptocurrency transactions to the top. We recently published an article in Bloomberg’s Tax Management Memorandum that looked at the aggressive moves the IRS is taking with respect to cryptocurrency. We looked at the disparate ways that the various U.S. government agencies define cryptocurrency,…

Since the ICO boom in 2017, governments around the world began settling on different approaches to regulating the crypto industry. Many legislatures and regulators proactively drafted new laws, regulations, guidance and frameworks for the crypto industry. Others used investigatory authorities and enforcement actions to regulate the industry. We expect that governments around the world will remain active for the foreseeable future as cryptoassets become more mainstream. Baker McKenzie’s new guide, Crypto around the World, presents…

In a previous post, we explained how the U.S. Internal Revenue Service had introduced a question on the 2020 tax form that asked, “at any time during 2020 did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency.” Along another path, the IRS’s Operation Hidden Treasure is a partnership between the civil office of fraud enforcement and the criminal investigation unit aimed at rooting out tax evasion from cryptocurrency owners. …

A federal judge in Canada issued an Order compelling Coinsquare Ltd to divulge customer details to the Canada Revenue Agency. Coinsquare is a crypto-exchange based in Toronto. In a statement posted to its blog, Coinsquare characterized the result as a “significant victory.” According to Coinsquare, instead of providing the CRA with all client data dating back to 2013 as was initially requested, Coinsquare and the CRA agreed that information relating to 90-95% of the clients…

An indictment unsealed on December 9, 2020 shows that cryptocurrency founder, Amir Bruno Elmaani (aka “Bruno Block”) has been charged with two counts of U.S. federal tax evasion. Elmaani is alleged to have made millions of dollars in income from the sale and exchange of cryptocurrencies but attempted to obscure his ownership of that income through various schemes and evaded reporting that income to the U.S. IRS. In September and October 2017, Elmaani, using his…

Under U.S. tax law, cryptocurrencies are treated like property. As a result, each time someone buys, sells or exchanges a digital asset, it is considered a taxable event and the capital gains tax applies. The Internal Revenue Service is of the view that many reportable transactions go unreported. One method it is adopting to try capture such taxes is that, starting in 2020, the very first question on the standard 1040 Form is whether “at…