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August 14, 2019


The IRS has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly.

"Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties," said IRS Commissioner Chuck Rettig. "The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations."

The IRS started sending the educational letters to taxpayers last week. By the end of August, more than 10,000 taxpayers will receive these letters. The names of these taxpayers were obtained through various ongoing IRS compliance efforts.

For taxpayers receiving an educational letter, there are three variations: Letter 6173, Letter 6174 or Letter 6174-A, all three versions strive to help taxpayers understand their tax and filing obligations and how to correct past errors.

Taxpayers are pointed to appropriate information on, including which forms and schedules to use and where to send them.

Last year the IRS announced a Virtual Currency Compliance campaign to address tax noncompliance related to the use of virtual currency through outreach and examinations of taxpayers. The IRS will remain actively engaged in addressing non-compliance related to virtual currency transactions through a variety of efforts, ranging from taxpayer education to audits to criminal investigations.

Virtual currency is an ongoing focus area for IRS Criminal Investigation.

IRS Notice 2014-21 states that virtual currency is property for federal tax purposes and provides guidance on how general federal tax principles apply to virtual currency transactions. Compliance efforts follow these general tax principles. The IRS will continue to consider and solicit taxpayer and practitioner feedback in education efforts and future guidance.

The IRS anticipates issuing additional legal guidance in this area in the near future. Taxpayers who do not properly report the income tax consequences of virtual currency transactions are, when appropriate, liable for tax, penalties and interest. In some cases, taxpayers could be subject to criminal prosecution.

Article from the TaxBook

Need legal or tax assistance with your vitural currency matters. Email us here.  Visit our website at  We are attorneys and CPAs who specialize in International, Expatriate and Nonresident US taxation.

August 12, 2019


Many clients and potential clients have asked us what other services do we provide other than tax US tax return preparation.  A list of some of those services are included below: 

  • Phone and internet  mini -consultations with individual taxpayers  in connection with expatriate, nonresident and international tax planning and questions.
  • Phone and internet consultations with CPAs and Enrolled Agents that require advice or consultation on International, Nonresident and Expatriate US tax forms, rules and regulations.
  • Assist taxpayers preparing their own tax returns with questions and the preparation of international, nonresident and expatriate tax forms
  • Review of your self prepared returns that contain international, expatriate and nonresident tax issues and forms.
  • Formation on US corporations, LLCs and Partnerships for expatriates and most states.
  • IRS and State Tax Agency defense against audits and assessments.
Almost no firms offer the combined expertise of CPAs and Attorneys at reasonable fees. Contact with your questions, and for information.  CONTACT US HERE BY EMAIL.  We have been doing nonresident, expatriate and international taxes for over 25 years.  Call us in the US at 949-480-1235.

August 9, 2019

Are Virtual Currencies such as Bitcoin reportable on FBAR forms (form 114)? - the answer is sometimes yes.

The IRS does not consider virtual currencies such as BItcoin to be the same as cash or money. They consider it to be an asset to be treated for tax purposes much like stock, when purchased, sold or held as an investment.

There are certain situations however when virtual currency is reportable the same as a foreign bank account on the FBAR form 114 which is used to report foreign bank and financial accounts.  Failure to file this form each year can result in penalties of $10,000 or more. There are many reported court cases where the penalties for failing to file this form have resulted in penalties to one taxpayer of many hundreds of dollars or more.

Read more about the rules for reporting your virtual currency  - when to do it and when not -to the IRS HERE.

If you have not been filing this form and think you may be required to do so, and want to avoid the high penalties, need assistance or have questions CONTACT US.  We are CPAs and attorneys that have combined experience of over 60 years with US International Taxation.