FinCEN Intends to Amend FBAR Regulations to Include Virtual Currency

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Matthew L. Roberts

Matthew L. Roberts

Principal

469.998.8482
mroberts@freemanlaw.com

Mr. Roberts is a Principal of the firm. He devotes a substantial portion of his legal practice to helping his clients successfully navigate and resolve their federal tax disputes, either administratively, or, if necessary, through litigation. As a trusted advisor he has provided legal advice and counsel to hundreds of clients, including individuals and entrepreneurs, non-profits, trusts and estates, partnerships, and corporations.

Having served nearly three years as an attorney-advisor to the Chief Judge of the United States Tax Court in Washington, D.C., Mr. Roberts leverages his unique insight into government processes to offer his clients creative, innovative, and cost-effective solutions to their tax problems. In private practice, he has successfully represented clients in all phases of a federal tax dispute, including IRS audits, appeals, litigation, and collection matters. He also has significant experience representing clients in employment tax audits, voluntary disclosures, FBAR penalties and litigation, trust fund penalties, penalty abatement and waiver requests, and criminal tax matters.

Often times, Mr. Roberts has been engaged to utilize his extensive knowledge of tax controversy matters to assist clients in their transactional matters. For example, he has provided tax advice to businesses on complex tax matters related to domestic and international transactions, formations, acquisitions, dispositions, mergers, spin-offs, liquidations, and partnership divisions.

In addition to federal tax disputes, Mr. Roberts has represented clients in matters relating to white-collar crimes, estate and probate disputes, fiduciary disputes, complex contractual and settlement disputes, business disparagement and defamation claims, and other complex civil litigation matters.

FinCEN Intends to Amend FBAR Regulations to Include Virtual Currency

Every year, U.S. persons are required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (“FBAR”), if the total amount of their foreign accounts exceed $10,000.  Under current regulations, reportable foreign accounts include bank accounts, securities accounts, and certain other specified financial accounts (e.g., insurance accounts with cash values).  See 31 C.F.R. § 1010.350(c).

On New Year’s Eve, however, the Financial Crimes Enforcement Network (“FinCEN”) announced its intent to broaden the list of reportable accounts to include virtual currency.  Specifically, FinCEN issued a notice that provides:

Currently, the Report of Foreign Bank and Financial Accounts (FBAR) regulations do not define a foreign account holding virtual currency as a type of reportable account.  (See 31 CFR 1010.350(c)).  For that reason, at this time, a foreign account holding virtual currency is not reportable on the FBAR (unless it is a reportable account under 31 C.F.R. 1010.350 because it holds reportable assets besides virtual currency).  However, FinCEN intends to propose to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account under 31 CFR 1010.350.

FinCEN Notice 2020-2.

U.S. persons with significant cryptocurrency and unresolved U.S. tax issues—such as unreported income from cryptocurrency transactions—should carefully consider whether it makes sense to come forward now to resolve their tax matters.  Schedule a consultation or call (214) 984-3410 to discuss your virtual currency and tax concerns.

 

Other Insights of interest regarding virtual currency:

Can You Go to Jail For Failing to Disclose Virtual Currency on a Tax Return or as Part of an Offer for a Collection Alternative?

Frequently Asked Questions on Cryptocurrency Taxation

IRS Assures Congress:  Aggressive Enforcement Efforts are Ahead

 

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Have Cryptocurrency or Blockchain Issues or questions? Contact Freeman Law Contact us now or Schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.

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