Posts tagged Underpayment
Virtual Currency Transactions

U.S. taxpayers are required to pay tax on their global income. On July 26, 2019, the IRS released Information Release 2019-132 announcing that it has started sending letters to owners of virtual currencies, such as Bitcoin, Ethereum, and others advising them to pay back taxes on any unreported transactions. The IRS confirms that they have sent out more than 10,000 letters that will be received by taxpayers by the end of August.  Notice 2014-21 provides that virtual currency is treated as property for U.S. federal tax purposes, and that the general tax principles that apply to property transactions apply to transaction using virtual currency. A taxpayer who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value in U.S. dollars of the virtual currency as of the date that it was received.

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IRS Announcements | January 2019

The underpayment penalty waiver threshold is lowered from 90% to 85% of 2018 tax liability to help those who have under-withheld because of the tax reform law. It will also apply to individuals making quarterly estimates, but not to corporations.

The standard mileage rate has been increased to 58 cents/mile for 2019 along with adjustments to the charitable and medical mileage rates.

The agency announced tax season will begin January 28 with the released update to its contingency plans for government shutdowns and the expected impacts of a continuing shutdown on the tax filing season.

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