CryptoTaxPrep.com Presents: Moving Your Cryptocurrency Overseas to Avoid Tax Liability


– [Narrator] Moving your
cryptocurrency overseas to avoid tax liability could cost you big. The Internal Revenue Service, IRS, has been figuring out how it will deal with virtual currency investments since at least 2014. Tax policy regarding bitcoin and other cryptocurrencies in the US is now pretty clear, and the agency is coming after crypto investors who haven’t paid taxes on their holdings. Bitcoin and the thousands
of alternative coins that followed have made
millionaires out of many, and until recently these investors have largely avoided paying taxes. The IRS is already pursuing
legal action against Coinbase, the most widely used bitcoin
exchange in the United States, and it isn’t letting anyone off the hook. Many cryptocurrency investors may want to find ways around paying taxes on their virtual currency assets, and some of them will go overseas. Avoiding your taxes
completely is not possible. However, Happy Tax
employs top cryptocurrency accountants that can help
you minimize your tax bill. The skilled and experienced
certified public accountants, CPA, at Happy Tax, specifically focus on the needs of cryptocurrency investors, and have been trained on
the most current details of US tax policy. If you hold cryptocurrencies,
the professionals at Happy Tax can help you minimize your tax liability without
putting you at risk of crossing the IRS. Foreign bank accounts as tax shelters? Think again. Americans hold assets in foreign
banks for several reasons. Perhaps they travel regularly or they have businesses operating in different parts of the world. Some people, however, are tempted to use offshore bank accounts to
commit financial crimes, including tax evasion. Many people believe, incorrectly, that they don’t have to pay taxes on money held in foreign accounts. If you do, so what? It’s not like the IRS will
ever know about it, right? Wrong. In the past, people could
open Swiss bank accounts without even providing a legal name. Due to the nation’s strict privacy laws, holders of Swiss bank accounts could stay nearly anonymous, making them attractive for people trying to hide money from the IRS. However, these days are long gone. Swiss banks have spent
much of the last decade trying to shake their poor reputations. This means they’re
naming names to the IRS. Last year, financial giants
like Credit Suisse and UBS were caught up in IRS sweeps
looking to nail tax evaders, and they’re singing like canaries. Foreign banking is more of
a headache than it’s worth. Unless you live or work internationally, holding a foreign bank
account as a US citizen is probably more trouble than it’s worth. First, the IRS requires you to report worldwide income on your tax return. So, even if you make money outside the US, you must report it to the IRS and pay proper taxes. Second, if you have an
interest in a foreign bank or financial account,
this must be reported separately on a Schedule B
attached to your tax return. The IRS isn’t the only regulator involved in monitoring foreign bank accounts. The Treasury Department
requires all persons with foreign bank accounts to file a Report of Foreign Bank and
Financial Accounts, FBAR, if the foreign accounts
exceed $10,000 in value at any time during the year. New if you buy $5,000 worth of bitcoin using a foreign account,
and it doubles in value during a peak in the market, FBAR reporting requirements are triggered even if the price goes back down. The penalties for keeping
a foreign bank account without informing the IRS or Treasury Department are staggering. Not filing an FBAR is
punishable by up to $10,000 in penalties per violation, and that’s for an accidental omission. If the agency finds the FBAR non-reporting to be intentional, these
penalties jump to $100,000 or 50% of the foreign-held
account balance, whichever is greater. There is no statue of
limitations on civil tax fraud, so the IRS can come after you for as many back taxes, plus
interest, fees, and penalties, as they can find. Oh yeah, and don’t forget
the 20% inaccuracy penalty the IRS usually tacks on in these cases. Or the 75% civil fraud penalty applies in extreme cases. Having a foreign bank
account and not reporting it can cost you a lot of money. That’s pretty bad, but it gets worse. Both the IRS and the Treasury Department can prosecute you for financial crimes for failing to properly
report a foreign bank account. Filing a false return is a felony, so lying on your tax return can land you up to five years in federal prison. The IRS can criminally
prosecute tax evasion as far back as six years, so this risky behavior
can catch up with you long after you have abandoned the scheme. Crimes related to failing to file an FBAR come with financial
penalties of up to $500,000 and a prison term of up to 10 years. Play it safe, pay your taxes. In the past, cryptocurrency investors have enjoyed a marketplace largely free from government intrusion. Some continue to believe
that they can dodge taxation by through rumored loopholes like stashing assets in a foreign bank. Unfortunately, this is not the case. The IRS is actively pursuing
cryptocurrency investors for back taxes. Despite everyone’s wishes to the contrary, avoiding tax liability altogether is not possible for most people. Attempting to evade federal taxes by old schemes like opening
a Swiss bank account is much more likely to
land you in hot water with the feds than protect
you from tax exposure. As a result, cryptocurrency investors need to start seriously considering their tax liability when
making financial decisions. IRS enforcement against
cryptocurrency investors is ramping up, and new tax laws came onto the books in 2018. With all these new developments, cryptocurrency investors face
a challenging tax environment. In these circumstances,
a good tax professional can be invaluable. The trained cryptocurrency
accountants at Happy Tax can help you make sure your wallet is protected from the IRS. Happy Tax employs certified
public accountants, CPAs, to provide you
with the highest quality tax advice, and the degree
of service you deserve. Don’t make the mistake of
trying to evade the IRS. Instead, talk to a Happy
Tax professional today to discuss how you can safely and legally minimize your tax liability.

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