The use of digital currency and its underlying technology may be gaining traction in the traditional economy, but the industry remains a focus of law enforcement interest. The IRS, recognizing the opportunity for digital currency to be used as a possible vehicle for tax evasion, declared in March 2014 that digital currency is to be taxed as “property,” rather than as “currency.” Given the close relationship between the IRS and enforcement of the Bank Secrecy Act (BSA), the legal fields of tax controversy and tax compliance are necessarily affected by the evolving enforcement regime regarding the use – or misuse – of digital currency.… Read More
Over the past several years, the federal government has stepped up enforcement of the reporting requirements for foreign bank accounts under the Bank Secrecy Act. The IRS has had several voluntary disclosure initiatives, and there have been some prominent criminal prosecutions for willful non-reporting accountholders.
Because of the potential for criminal prosecution, a basic question arises when the IRS issues a summons for foreign bank records: can the accountholder refuse to turn over records by invoking his Fifth Amendment privilege against self-incrimination? Last week, the Third Circuit joined the growing number of appellate courts holding that the required records exception to the Fifth Amendment applies to the records an accountholder is required to maintain under 31 C.F.R.… Read More