This article series reviews the changes and assesses the impacts resulting from the final U.S. broker digital asset reporting regulations published in the Federal Register on July 9, 2024.
February 28, 2025聽聽| By:聽Kelli Wooten
For those of us in the Information Reporting & Withholding space, Valentine鈥檚 Day cards (and chocolate) were a refreshing change from the 鈥渓ove letters鈥� that the IRS Foreign Payments Practice continues to send. To help guard against your organization receiving an unwanted 鈥渓ove letter,鈥� read this article鈥檚 practical tips for navigating this filing season.
The Organisation for Economic Co-operation and Development (OECD) has published new Crypto-Asset Reporting Framework (CARF) and amended the Common Reporting Standard (CRS) XML Schemas accompanied by User Guides that will support the transmission of information between tax authorities pursuant to each regime. This article reviews these new details in conjunction with the IRS Draft Form 1099-DA, Digital Asset Proceeds from Broker Transactions.
The final U.S. broker digital asset reporting regulations published in the Federal Register on July 9, 2024 (the final regulations) provide exceptions to reporting for certain sales of digital assets involving closed loop transactions. The final regulations also provide a separate exception to the rules requiring that dual classification assets be reported as digital assets if those dual classification assets are settled on a limited-access regulated network. This article explores the nuances of both and explains the difference between the two.
This article provides an overview of nonfungible tokens (NFTs) that are within the definition of digital assets under the final U.S. broker digital asset reporting regulations published in the Federal Register on July 9, 2024 (the 鈥渇inal regulations鈥�), the optional reporting method and de minimis reporting threshold for certain 鈥渟pecified nonfungible tokens,鈥� and a backup withholding exemption in certain transactions involving specified NFTs.
On September 9, 2024, the Internal Revenue Service (IRS) published draft Instructions for Form 1099-DA (Draft Instructions). These instructions provide information to brokers for completing Form 1099-DA for each reportable digital asset sale a broker has effected beginning in calendar year 2025. This article provides an overview of the Draft Instructions as they relate to the final U.S. broker digital asset reporting regulations published in the Federal Register on July 9, 2024 (the 鈥渇inal regulations鈥�).
This article provides an overview of stablecoins that are within the definition of digital assets under the final U.S. broker digital asset reporting regulations published in the Federal Register on July 9, 2024 (the final regulations), the optional reporting method for qualifying stablecoins, de minimis thresholds, and backup withholding.
This article covers the requirements for U.S. digital asset brokers to report cost basis on the sale of digital assets under the final broker digital asset reporting regulations published in the Federal Register on July 9, 2024 (the 鈥渇inal regulations鈥�).
This article provides an overview of the requirements for a U.S. digital asset broker to file information returns and furnish payee statements that report gross proceeds on sales of digital assets under the final broker digital asset reporting regulations published in the Federal Register on July 9, 2024 (the 鈥渇inal regulations鈥�).
This article provides a discussion of what backup withholding means in the broker digital asset reporting framework under the final U.S. broker digital asset reporting regulations published in the Federal Register on July 9, 2024. It provides an overview of the concept of backup withholding and the transitional relief rules provided by the U.S. Internal Revenue Service (IRS) in the regulations and a separate Notice 2024-56.
This article provides a general overview of the tax documentation required to be collected by U.S. digital asset brokers under the final U.S. broker digital asset reporting regulations published in the Federal Register on July 9, 2024 (the 鈥渇inal regulations鈥�). The final regulations contemplate how U.S. digital asset brokers, including processors of digital asset payments (PDAPs), will document their customers for purposes information reporting or establishing an exemption from information reporting of digital asset transactions.
In this article the authors discuss some of the key timeline considerations for brokers subject to a reporting requirement under the final regulations on broker digital asset information reporting. It also provides a brief overview of certain transactions for which the Treasury and the IRS have provided transitional or other relief rules and exceptions, as these rules and exceptions may be important in planning implementation efforts.
On June 28, 2024,
The U.S. Treasury and IRS issued final regulations on digital asset tax information reporting requirements, which are scheduled to be published in the Federal Register on July 9, 2024. The final regulations implement the statutory amendments to broker reporting rules enacted as part of the Infrastructure Investment and Jobs Act of 2021 (鈥淚nfrastructure Act鈥�). The 2024 final regulations adopt the 2023 proposed regulations with certain modifications in response to comments and public hearing testimony.
May 9, 2024 | By:聽Martin L. Mueller Jr.听补苍诲听Cyrus Daftary
The recently issued Green Book reintroduced a proposal to accelerate Form 1099 deadlines by two months. Per the Green Book, the proposal would help the IRS detect fraud and foster taxpayer compliance. However, the new deadlines will require taxpayers to update due diligence processes to avoid drowning in year-end filing obligations. In Accelerating 1099 Deadlines, Prioritizing Taxpayer Efficiency, we discuss the reasons for the change and administrative issues that payors will need to address in further detail.
March 12, 2024 | By:聽Martin L. Mueller Jr.
On January 1, 2024, the new beneficial ownership information (BOI) reporting rules went into effect, meaning that many companies will need to identify and begin submitting information about their beneficial owners. Thanks to a late extension of the requirements, new entities will not need to report until April, at the earliest, but that鈥檚 just around the corner and many companies are still confused by the new rules, or possibly unaware of the requirements altogether. Complicating matters further, a recent ruling held that the reporting rules represented Congressional overreach and are unconstitutional. In this article, we discuss the origin of the new BOI reporting rule, as well as the new due diligence requirements for companies going forward.
January 29, 2024 |聽By:聽Kelli Wooten
It is a new year, and there are a lot of changes in the information reporting and withholding space which will impact tax year 2023 filings. On this article the author discusses how organizations can prepare for electronic filing requirement threshold changes, the new requirement to electronically file Form 1042, and the need to ensure you have an updated Transmitter Control Code (TCC) to complete Form 1099 filings.
January 17, 2024 | By:聽Carson Le听补苍诲听Jigna Patel
FATCA Intergovernmental Agreements (IGAs) between the United States and foreign jurisdictions are typically premised on the automatic exchange of information called for in the income tax treaties between the countries, and accordingly changes to the status of an income treaty can impact the status of the corresponding IGA. The income tax treaty between the United States and Hungary was recently terminated, while the income tax treaty between the United States and Chile recently entered into force. This article discusses how these changes could have substantial FATCA impacts on residents of these countries as well as the counterparties they deal with.
On November 21, the IRS once again announced transitory relief for Forms 1099-K, raising the de minimis threshold for Third Party Settlement Organizations (TPSOs) back to $20,000 and 200 transactions for payments made in 2023. Last year鈥檚 relief caused significant confusion for taxpayers and state agencies. In聽D茅j脿 vu, Holidays Bring Form 1099-K Relief Once More, we discuss the recent relief, issues that taxpayers will likely encounter in the upcoming filing season, and additional changes announced for 2024. Read Article
On November 13, 2023, the IRS hosted a telephonic hearing to discuss proposed regulation regarding digital asset transactions. Over the course of the hearings, taxpayers discussed a number of issues, ranging from the broad language in the proposed regulations to the inability for certain industry participants to provide required information due to various constraints. This article lists some of the follow-up questions asked by the IRS representatives, showing that they are actively working towards finding solutions to facilitate reporting on digital asset transactions. Read full article.
On August 25, 2023, the U.S. Treasury Department and IRS released proposed regulations that set forth new digital asset tax information reporting requirements. The proposed regulations provide guidance on statutory amendments to broker reporting rules enacted as part of the Infrastructure Investment and Jobs Act of 2023 and are issued principally under section 6045. The proposed regulations also include guidance under sections 6050W, 1001, and 1002. In the following articles, 乐鱼（Leyu）体育官网 professionals from the Information Reporting & Withholding Tax Services practice discuss the impact of these regulations on certain industry verticals including custodial exchanges, decentralized exchanges, nonfungible token (NFT) marketplaces, online gaming marketplaces, and digital asset payment providers.
Nearly a decade into FATCA and CRS reporting, many foreign financial institutions are still completing annual filings, including "dead" entities and those that should be classified as non-financial foreign entities (NFFEs). Despite the simplicity of nil reporting, the costs can accumulate. Lack of clear deregistration guidance in many countries adds to the confusion. In "Kill or Be Billed: Deregistering Dead FATCA and CRS Entities," we explore the challenges compliance officers face in this process. Read full article.
On August 25, 2023, the U.S. Treasury and IRS released the long-awaited proposed regulations on digital asset tax information reporting requirements. The proposed regulations provide guidance on statutory amendments to broker reporting rules enacted as part of the Infrastructure Investment and Jobs Act of 2021 and are issued principally under Section 6045 of the Internal Revenue Code (鈥淐ode鈥�). Regulations under other provisions of the Code, however, are also amended in coordination with these rules, including provisions under Sections 6050W, 1001 and 1012. Read full article.
In the 1990s, the IRS acknowledged that sophisticated tax avoidance schemes and administrative burdens had resulted in extensive noncompliance, causing the withholding system to fall short of its goals. The IRS sought to revamp the system by standardizing and simplifying the reporting process, but needed to ensure that responsible entities would be fully aware of their obligations and equipped to handle their compliance burdens. Thus, the Qualified Intermediary program was born. In Back to Basics: The Origin of the Qualified Intermediary Program we review the developments that led to the emergence of the program and the creation of the QI agreement. In later installments, we will dive deeper into the requirements that QIs are tasked with when entering into these agreements with the IRS, and how the program has evolved to incorporate different reporting regimes. Read full article.
Valid treaty claims on the Forms W-8BEN and BEN-E are the 鈥渦nicorn鈥� of the Information Reporting and Withholding world. With the significant increase in IRS examination activity, let鈥檚 review some common questions about treaty claims. Read full article.
With warmer weather comes camping trips, family vacations, and鈥tate fishing expeditions? Between state specific nil filing requirements coupled with upscaled reporting portals, taxpayers are increasingly seeing state notices 鈥渇ishing鈥� for information. In many cases, taxpayers have no reporting obligations, but are being assessed 鈥渞easonable penalties鈥� in an attempt by the state to force compliance. In Gone Fishing: State Nil Reporting and Penalty Notices, we discuss actions that are triggering these notices and the steps that taxpayers should take to reduce future assessments. Read full article.
As we head into the summer months, the Automatic Exchange of Information (AEOI) has kicked into full gear. In light of the FATCA and CRS reporting season, noted here are some key upcoming deadlines and helpful reporting guidance that may be of interest. Read full article.
The IRS recently unveiled plans to utilize roughly $80 billion allocated to it under the Inflation Reduction Act of 2022. Large portions of the budgeted amount will target system upgrades and improving taxpayer guidance and resources. Per early reports, the increased spending has already resulted in efficiency upgrades. Despite IRS reassurances, taxpayers remain apprehensive about upcoming changes to information reporting requirements, increased enforcement, and potential audits. In this article, we discuss reporting deficiencies that the IRS is seeking to correct, upcoming reporting changes, and proposed improvements under the $80 billion budget. Read full article
The combination of increased IRS enforcement on crypto assets, a delayed effective date for new broker reporting rules, and upcoming proposed regulations has left many taxpayers relieved but uncertain about the future. For years, there was little guidance, leaving most unsure about handling digital asset information. As brokers await the new regulations, they also speculate about additional processes. Recent legislative challenges and executive proposals aim to refine reporting. While a crackdown on crypto reporting is inevitable, the timing and specifics remain unclear. Read full article.
On December 23, 2022, Treasury and the IRS announced transitory relief for Form 1099-K reporting for Third Party Network Organizations (TPSOs), postponing the de minimis threshold of $600 for one year. Although the announcement came as welcome relief to many companies that are still working to align their compliance and reporting processes to the lower threshold, it has resulted in significant confusion for many payors, payees, and even state agencies. In Delayed Thresholds, Immediate Confusion: Form 1099-K Reporting Thresholds, we discuss how taxpayers are navigating compliance requirements in light of unclear guidance, and what payees can expect in the upcoming filing season. Read full article.
滨搁厂听聽announced delay of implementation of $600 reporting threshold for third-party settlement organizations鈥� Forms 1099-K
The 滨搁厂听Notice 2023-10聽announced that calendar year 2022 will be regarded as a transition period for purposes of IRS enforcement and administration with respect to the lowering, under the American Rescue Plan Act of 2021, of the de minimis threshold for reporting on third party settlement organizations (TPSOs) under section 6050W(e), from $20,000 on 200 or more transactions to any qualifying transaction over $600.
According to the聽:
In early 2022, the IRS issued a new withholding certificate, Form W-4R, which decoupled nonperiodic payments from the prior version of Form W-4P. Beginning January 1, 2023, payors will be required to collect updated forms that are specific to periodic and nonperiodic payments. Though the IRS granted a phase-in year, many payors are still updating their software and processes for this change while others may not yet be aware of the requirement. In聽Back to Basics: Periodic and Nonperiodic Withholding Certificates, we discuss the basics of periodic and nonperiodic withholding certificates, the reason for the new forms, and steps that businesses should be taking now to ensure that they are compliant in the new year. Read full article.
As taxpayers work to become compliant with state information reporting requirements, many businesses increasingly rely on the Combined Federal State Filing Program (CFSFP). However, many taxpayers are quickly becoming aware that their filings do not satisfy state reporting requirements due to a number of reasons, including updated state filing requirements that disallow use of the CFSFP or even state reporting nuances that taxpayers may be unaware of. Despite their best efforts to comply via the CFSFP, many taxpayers are receiving state notices, an issue that will only escalate as state agencies shift focus to issues such as unreported gig economy income. In聽Back to Basics: The Combined Federal State Filing Program, we discuss the purpose of the CFSFP, how to participate, and common misconceptions experienced by taxpayers. Read full article.
President Biden recently announced a plan that will provide student loan forgiveness, up to $20,000, for certain borrowers. As an added benefit, borrowers will not be subject to federal taxation on amounts forgiven under this plan. Although a handful of states have not indicated whether state taxation will be required, one has stated that it will. However, due to a recent IRS notice, federal reporting is not required by entities granting the relief, nor will state reporting be required due to tack-on laws in place for most states. Thus, it is unclear how states will identify the amounts forgiven, raising the issue of potential state penalties for taxpayers which do not self-report, even if they are unaware that self-reporting is required. Read full article.
On the cusp of a potential recession, investors in stocks or securities need to be cautious about advice they utilize for harvesting losses, if they plan on, or happen to repurchase substantially identical stock or securities close to a loss sale. Such tax loss harvesting strategies could trigger wash sale rules, even if the 鈥渞epurchase鈥� occurs before the sale. This is particularly problematic for unwary investors, since the information that brokers are required to report may be different from what investors need when determining whether they have run afoul of the rules. Born under recession era policy, both wash sale rules and wash sale reporting issues will likely rise in prominence again as investors face a volatile market. But what are the rules, why do they matter, and how can investors avoid inadvertently subjecting themselves to the impact of these rules? Read full article
Reduced Form 1099-K thresholds for the 2022 tax year will result in increased information reporting. Unfortunately, the challenges extend beyond federal reporting, as state Form 1099 reporting requirements can be much more complex to navigate.听Some states do not require Forms 1099-K, particularly those states with no state income tax 鈥� e.g., Texas, Alaska, etc. However, state legislatures in Florida and Tennessee have created two outliers, both for non-income tax reasons.听Read full article.
On May 3, Treasury and the IRS released an advanced copy of Notice 2022-23 (Notice), setting forth the proposed changes to the QI agreement. The pro-posed changes will permit a QI to act in that capacity when receiving certain amounts from a publicly traded partnership (PTP) that are subject to withholding under 搂1446(a) and 搂1446(f). In this聽Bloomberg Tax Management Real Estate Journal聽article, the authors provide an overview of the IRS Notice proposing changes to the qualified intermediary agreement, as well as some observations.听Read full article.
The IRS celebrated Tax Day by announcing on April 15th that backup withholding notices were on the way. Specifically, the IRS issued , stating that it will be issuing CP2100 and CP2100A Notices to taxpayers that filed certain information returns with missing Taxpayer Identification Numbers (TINs), incorrect names, or a combination of both. The following information provides details about what these notices are and what taxpayers need to do if they receive one.
Note that the information below is focused on backup withholding requirements under 搂 3406(a)(1)(B), also known as the . For further information on backup withholding under 搂 3406(a)(1)(C), dealing with payees that fail to fully report the correct amount of interest and dividend income on their federal income tax return, see the . Read full article.
On March 31, 2022, the Cayman Islands Ministry of Financial Services (Ministry) and Department for International Tax Cooperation (DITC) announced that the Cayman Tax Information Authority (TIA) has issued Enforcement Guidelines v1.0, with respect to the Common Reporting Standard (CRS) and Economic Substance (ES) frameworks. These guidelines set out the enforcement process and subsequent penalties for failure to comply by any persons within the scope of TIA鈥檚 compliance monitoring and enforcement powers. Read full article.
On March 15th, Representatives Chris Pappas and Cindy Axne introduced the Cut Red Tape for Online Sales Act (H.R. 7079) to raise the Form 1099-K reporting threshold from $600 to $5,000. The bill aims to ease the administrative burden on small online sellers and address concerns about overreporting income, overpayment of taxes, and privacy risks. It would be retroactive to 2022 and temporarily increase the de minimis transaction count to 200 for that year. Read full article.
When planning for year-end reporting, necessary steps should be taken to ensure your forms series 1099 are correctly processed and filed timely. In the following, we would like to highlight some guidance to your attention to avoid common errors you may encounter while preparing the forms. Read full article.
The de minimis threshold for section 6050W reporting on Forms 1099-K by third-party settlement organizations (TPSOs) was reduced substantially. The new instructions to Box 1a require TPSOs to report under 6050W any payment totals exceeding $600, regardless of the number of transactions. Under the prior de minimis threshold, TPSOs were not required to report under section 6050W until the total payments made to a payee exceeded $20,000 and the aggregate number of transactions for such payee exceeded two hundred. The new de minimis threshold applies to transactions made after December 31, 2021. Read full article.
The Internal Revenue Service (IRS) issued an updated version of Publication 1220 in the fall of 2021. One noteworthy change was the inclusion of Form 1099-NEC into the Combined Federal State Filing (CF/SF) Program. Form 1099-NEC was reintroduced for the 2020 tax year, but was not originally included in the CF/SF Program, leaving state agencies and taxpayers scrambling to get their processes updated ahead of the filing deadlines. The recent inclusion of the form in the program for the 2021 tax year comes as welcome relief to many taxpayers. Accordingly, some states have recently updated their guidance to note that they will accept the form when submitted through the CF/SF Program. However, not all state agencies have caught up with the update.听Read full article and view the table聽containing聽the states which currently accept Form 1099-NEC when there is no withholding to report.
Information return filing deadlines for the 2021 tax year are quickly approaching and state filing requirements are evolving. This notice outlines requirements to include state identification numbers when submitting Forms 1099-MISC and 1099-NEC. Click here聽to learn more and access a table聽containing state-by-state requirements, along with links to state portals where registration is required.
On November 10, the Internal Revenue Service (IRS) issued Rev. Proc. 2021-45, containing inflation-based adjustments across more than 60 tax provisions for the 2022 tax year, for returns required to be filed in 2023. Notably, the IRS increased penalties for taxpayers which failed to file correct information returns to the IRS and to payees.听Click here聽to read the full alert and learn more about the increases and corresponding 2021 amounts.
Nelson Suit, Cyrus E. Daftary, and Phil Garlett consider the cryptocurrency information reporting provisions in the Senate Infrastructure Bill and the broader implications of tax information reporting for crypto transactions. The proposed legislation would require 鈥渂rokers鈥� to provide Code Sec. 6045 cost basis reporting for sales of digital assets and Code Sec. 6045A transfer reporting on transfers of such assets. Read full article.
On September 27th, the Internal Revenue Service (IRS) issued a revised version of Publication 1220,听Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G聽(Rev 9-2021), containing several changes related to updates that the IRS issued over the 2021 calendar year. Notably, the IRS updated Section 12,听Combined Federal/State Filing (CF/SF) Program, to include Form 1099-NEC, Nonemployee Compensation, on the list of information returns which may be filed under the CF/SF Program. In addition, Section 7,听Reporting Nonemployee Compensation (NEC) for Tax Year 2021, was updated to note that the form is now part of the CF/SF Program, confirming that the IRS will accept submissions of the form for the 2021 tax year through the CF/SF Program. Read full article.
On September 3, the Bermuda Ministry of Finance announced that all Reporting Financial Institutions (RFIs) and Trustee-Documented Trusts (TDTs) must complete an annual CRS Compliance Certification Form, starting with the 2020 reporting period. The form will be available on the portal by October 15, 2021, and must be submitted by December 15, 2021, for the 2020 period. Future submissions are due by September 30 following the end of each reporting period. Only primary or secondary users registered in the portal can submit the form, and bulk uploads are not allowed. The Ministry provided guidelines to assist RFIs in preparing the form. Read Article
Over the past week, the Internal Revenue Service (IRS) has issued draft versions for its Form W-8 series, in particular Forms W-8ECI, W-8IMY, and W-8BEN and related instructions. The updates were necessary, in part, due to the Tax Cuts and Jobs Act of 2017 (TCJA). Specifically, the TCJA added Section 1446(f), which generally requires a transferee purchasing an interest in a partnership from a non-U.S. transferor to withhold 10% of the amount realized if a portion of the gain must be treated as effectively connected gain, unless an exception to withholding applies. Read full article.
On April 16, 2020, the Cayman Islands Tax Information Authority (TIA) updated the Common Reporting Standard (CRS) regulations, requiring most reportable financial institutions (FIs) to submit an annual CRS Compliance Form via the DITC Portal. This form is mandatory for reporting years FY19 onward, with the first deadline for both FY19 and FY20 forms set for September 15, 2021. The form covers five sections, including FI profile data, financial account details, AML/KYC procedures, and CRS process compliance. Even FIs that submitted nil returns must complete this form. A new bulk upload CSV file option is now available, but the DITC has released an FAQ to address potential issues. FIs are urged to seek professional assistance to ensure compliance and avoid penalties. Read full article.
On August 10, 2021, the Senate passed the Infrastructure Investment and Jobs Act, expanding tax reporting for cryptocurrency and digital assets. The bill broadens the "broker" definition to include non-custodial actors like blockchain validators and software developers. Digital assets, including cryptocurrencies and NFTs, will be treated as "covered securities" starting January 1, 2023, requiring cost basis reporting. Brokers must also report transfers to non-broker accounts, such as private wallets, and transactions over $10,000 will be treated as "cash." The House will review the bill in September, and industry participants are expected to lobby for changes. Centralized exchanges should start assessing their systems for compliance. Read full article.
With August approaching, it's time to start Form W-8 resolicitation efforts. Many institutions begin in early September to ensure updated forms by year-end. For a valid treaty benefits claim on Form W-8BEN-E, beneficial owners must tick specific boxes, write in the treaty country, and select the appropriate LOB provision. For services income, additional steps include providing a taxpayer ID and certifying the income is not attributable to a U.S. permanent establishment. Withholding agents must validate these claims, ensuring no conflicting addresses or payment instructions. Given the complexity, a robust validation checklist or automated system is recommended. Read full article.
The IRS is updating its process for submitting information returns through the Filing Information Returns Electronically (FIRE) system. Starting in September, users will need to create accounts through IRS Secure Access to obtain a Transmitter Control Code (TCC), replacing Form 4419. This change aims to automate the application and improve online management. However, it may create challenges for nonresident filers who lack a Social Security Number (SSN) or Individual Tax Identification Number (ITIN). The IRS suggests using third-party filers or software, but this can raise security and cost concerns. Nonresident filers are advised to secure or update their TCCs before September to avoid potential issues. Read full article.
President Biden has proposed an $80 billion plan to double the IRS workforce over 10 years, aiming to combat tax evasion and noncompliance. The plan, part of the American Families Plan, seeks to address a $600 billion tax gap in 2019, expected to rise to $7 trillion over the next decade. A recent TIGTA study found that backup withholding noncompliance and underreported employment taxes contributed $13.3 billion to the tax gap in 2018, with Form 1099-MISC and Form 1099-NEC being major culprits. Biden鈥檚 proposal includes enhanced enforcement, leveraging financial institution data, and updating IRS technology. Payors may need to update their compliance systems to avoid penalties. Read full article.
On April 8, 2021, the Internal Revenue Service (IRS) updated its聽Qualified Intermediary (QI), Withholding Foreign Partnership (WP), and聽Withholding Foreign Trust (WT) Frequently Asked Questions (FAQs) to聽provide an additional extension for periodic certifications. Specifically,听the IRS updated Question 10 in the 鈥淐ertifications and Periodic聽Reviews鈥� section. Read full article.
Recently, the IRS published an updated draft of Form W-4P, Withholding Certificate for Periodic Pension or Annuity Payments, and a draft of new Form W-4R, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions, for the 2022 calendar year. Form W-4P was previously titled Withholding Certificate for Pension or Annuity Payments. The IRS explains in a cover letter that the 2022 Form W-4P has been split into two forms, Form W-4P for periodic pensions and annuities, and new Form W-4R. Read full article.听
叠测听Kelli Wooten聽| Now is the time to order a transcript from the IRS to validate withholding deposits have been applied appropriately and that any credit carryovers from prior years have been posted to the taxpayer鈥檚 account.听
Not sure how to order a transcript? Here are two methods to utilize:
Remember to allow plenty of time to receive given potential delays in processing given COVID-19.听
The IRS published聽聽to provide transitional guidance under sections 6045 and 6045A with respect to the reporting of information on digital assets.
The Infrastructure Investment and Jobs Act (Infrastructure Act), enacted in 2021, amended provisions in sections 6045 and 6045A to clarify and expand the rules regarding the reporting of information on digital assets by brokers. Read full article.
Announcement 2023-2 states that the Treasury Department and the IRS intend to implement those amendments by issuing new regulations specifically addressing the application of sections 6045 and 6045A to digital assets and providing forms and instructions for broker reporting. Until such new regulations are finalized,
However, as explained in the accompanying聽IRS release鈥擨R-2022-227聽(December 23, 2022), this transitional guidance applies only to information returns filed or furnished by brokers. In contrast, taxpayers are still required to report any income they receive from transactions involving digital assets. They are also required to answer the digital asset question on page 1 of either聽听辞谤听.
This article discusses IRS guidance on classifying cryptocurrencies for U.S. federal income tax purposes; describes lot relief methodologies available to cryptocurrency investors and best practices for tracking and documenting tax basis; provides an overview of the tax considerations related to cryptocurrency losses; considers the tax consequences of updates to the Ethereum blockchain; and provides an update on the information reporting provisions in the Infrastructure Act. Read full article.
Congress recently expanded the cost basis reporting rules of Sec. 6045 as part of the Infrastructure Investment and Jobs Act, P.L.听117-58聽to require "brokers" to provide cost basis reporting for "digital assets."聽This article discusses some issues that Treasury will have to grapple with when providing cost basis reporting聽guidance. Read full article.
Growing investment and recent tax developments have generated increased interest in cryptocurrency staking. In this聽Journal of Taxation of Financial Products聽article, the authors provide a general overview of staking and consider the different potential tax characterizations of staking and the general U.S. income characterizations. They then provide several considerations for special classes of investors, such as foreign and U.S. tax-exempt investors. Read full article.
Although a number of cryptocurrencies have seen significant long term price appreciation, the volatility of these assets, their boom-and-bust market cycles, and taxpayers鈥� ability to specifically identify the units of cryptocurrency sold could result in some cryptocurrency investors realizing significant tax losses upon sale. In this article, which appeared in the聽Journal of Taxation of Financial Products,听the authors consider whether the wash sale rules place limits on the deductibility of cryptocurrency losses and present a case for why cryptocurrencies are most likely outside the scope of the wash sales rules as they currently stand today. Read full article.
In this article, which appeared in the聽Journal of Taxation of Financial Products, the 乐鱼（Leyu）体育官网 authors聽examine the proper tax treatment of cryptocurrency loans, a 铿乶ancial product that has recently emerged in the budding cryptocurrency industry.听Read full article.
December 23, 2022 | TaxNewsFlash No. 2022-396
The IRS published聽聽to provide transitional guidance under sections 6045 and 6045A with respect to the reporting of information on digital assets.
The Infrastructure Investment and Jobs Act (Infrastructure Act), enacted in 2021, amended provisions in sections 6045 and 6045A to clarify and expand the rules regarding the reporting of information on digital assets by brokers.
Announcement 2023-2 states that the Treasury Department and the IRS intend to implement those amendments by issuing new regulations specifically addressing the application of sections 6045 and 6045A to digital assets and providing forms and instructions for broker reporting. Until such new regulations are finalized,
However, as explained in the accompanying聽IRS release鈥擨R-2022-227聽(December 23, 2022), this transitional guidance applies only to information returns filed or furnished by brokers. In contrast, taxpayers are still required to report any income they receive from transactions involving digital assets. They are also required to answer the digital asset question on page 1 of either聽听辞谤听.
December 2022| by聽Hubert Raglan,听Pete Ritter,听Nelson Suit,听补苍诲听Joshua Tompkins,
This article discusses IRS guidance on classifying cryptocurrencies for U.S. federal income tax purposes; describes lot relief methodologies available to cryptocurrency investors and best practices for tracking and documenting tax basis; provides an overview of the tax considerations related to cryptocurrency losses; considers the tax consequences of updates to the Ethereum blockchain; and provides an update on the information reporting provisions in the Infrastructure Act.
November 2,听2022| by Pete Ritter,听Nelson Suit, Joshua Tompkins, and Hubert Raglan
Now is the time for investors in cryptocurrencies to recognize approaching year-end considerations and possible planning opportunities. Pete Ritter, Nelson Suit, Joshua Tompkins, and Hubert Raglan discuss potential considerations, including the recent Ethereum 鈥淢erge鈥� and the taxation of staking rewards, tax loss planning, and expected information reporting regulations in Year-End Tax Topics for Cryptocurrency Investors.听
June 01, 2022| by聽Hubert Raglan,听Pete Ritter, and聽Joshua Tompkins
Congress recently expanded the cost basis reporting rules of Sec. 6045 as part of the Infrastructure Investment and Jobs Act, P.L.听117-58聽to require "brokers" to provide cost basis reporting for "digital assets."聽This article discusses some issues that Treasury will have to grapple with when providing cost basis reporting聽guidance.
May 2, 2022 | OECD
On 22 March 2022, the Organisation for Economic Co-operation and Developmen (OECD) invited interested parties to provide comments on the Crypto-Asset Reporting Framework (CARF) and Amendments to the Common Reporting Standard. Click聽here聽to access the CARF comment letters available on the OECD site, including input from 乐鱼（Leyu）体育官网.
April 2022聽| by聽Peter Ritter听补苍诲听Joshua Tompkins
Growing investment and recent tax developments have generated increased interest in cryptocurrency staking. In this聽Journal of Taxation of Financial Products聽article, the authors provide a general overview of staking and consider the different potential tax characterizations of staking and the general U.S. income characterizations. They then provide several considerations for special classes of investors, such as foreign and U.S. tax-exempt investors.
January 21, 2022 | by聽Nelson Suit听补苍诲听Joshua Tompkins
Joshua Tompkins and Nelson suit share their insights on existing and emerging income tax and tax information reporting issues for banks as they approach the crypto sector during this聽episode of In the Vault with 乐鱼（Leyu）体育官网 banking podcast.听
November 16, 2021 | by聽Nelson Suit
On this episode of IRW Coffee Break,听Danielle Nishida and Nelson Suit discuss the new requirements for reporting of digital assets in the Infrastructure Investment and Jobs Act that was signed into law.听
October 2021 | by聽Joshua Tompkins听补苍诲听Paul Kunkel
Although a number of cryptocurrencies have seen significant long term price appreciation, the volatility of these assets, their boom and bust market cycles, and taxpayers鈥� ability to specifically identify the units of cryptocurrency sold could result in some cryptocurrency investors realizing significant tax losses upon sale. In this article, which appeared in the聽Journal of Taxation of Financial Products,听the authors consider whether the wash sale rules place limits on the deductibility of cryptocurrency losses and present a case for why cryptocurrencies are most likely outside the scope of the wash sales rules as they currently stand today.
October 20, 2021 | by聽Pete Ritter,听Nelson Suit,听Joshua Tompkins, and聽Hubert Raglan
Now is the time for investors in cryptocurrencies to recognize approaching year-end considerations and possible planning opportunities. Potential legislative developments that might affect cryptocurrency transactions and the cryptocurrency ecosystem more broadly should also be considered. In this 乐鱼（Leyu）体育官网 What's News in Tax article, the authors review the classification of cryptocurrencies, issues concerning specific lot identification and tax loss harvesting, and current legislative proposals that may impact information reporting, wash sale rules, and constructive sale rules.
October 12, 2021 | by聽Nelson Suit,听Cyrus Daftary, and聽Phil Garlett
In this article, which appeared in the聽Journal of Taxation of Financial Products, the authors from the 乐鱼（Leyu）体育官网 Information Reporting and Withholding Tax Services practice consider the cryptocurrency information reporting provisions in the Senate Infrastructure Bill and the broader implications of tax information reporting for crypto transactions. The proposed legislation would require 鈥渂rokers鈥� to provide Code Sec. 6045 cost basis reporting for sales of digital assets and Code Sec. 6045A transfer reporting on transfers of such assets.
October 2021 | by聽Peter Ritter,听Joshua Tompkins, and Grant Dalbey
In this聽Journal of Taxation of Financial Products聽article, the 乐鱼（Leyu）体育官网 authors consider聽he tax characterization of wrapped bitcoin and conclude that there are good arguments for treating minting wrapped bitcoin, burning wrapped bitcoin, and exchanging bitcoin and wrapped bitcoin on third-party exchanges as nontaxable transactions.听
October 2020 | by聽Joshua Tompkins聽and Hubert Raglan
In this article, which appeared in the聽Journal of Taxation of Financial Products, the 乐鱼（Leyu）体育官网 authors聽examine the proper tax treatment of cryptocurrency loans, a 铿乶ancial product that has recently emerged in the budding cryptocurrency industry.听
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March 5, 2025 | Forms 1042 and 1042-S Reporting Updates
This TaxWatch webcast discusses relevant aspects to take into considerations while completing Forms 1042 and 1042-S.
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