irs

irs bitcoin rule: 5 things accountants need to know

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item 5: brace for new work.

by hitendra patil
 pransform inc.

you may need to start asking your clients about bitcoin. new irs guidance treats bitcoins and other crypto-currencies not as money, but as property, for tax purposes and applies immediately to all returns. see the full text of notice 2014-21 (pdf).

among other things, the irs advised that:

  • as an employer, if you pay wages in bitcoins:
  • you must report it on a w-2.
  • you must ensure income tax withholding.
  • you must ensure payroll taxes deduction.
  • if you pay contractors and service providers in bitcoins, such payments are taxable and self-employment tax rules generally apply.
  • if you make a payment of $600 or more in a taxable year to an independent contractor for the performance of services, you are required to report that payment to the irs and to the payee on form 1099-misc, miscellaneous income.

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tax professionals lag last year in early filing

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in its first sounding on tax season 2013, the irs says filings are coming in faster this year. and that may be true enough. as of feb. 7, the irs received 27.3 million returns, up 2.5 percent compared to the same time last year. electronically filed returns account for almost 96 percent of those filed so far this year.

but filing by professionals is actually running behind last year, by about 5.6%, and without the crushing effects of last year’s government shutdown. read more →

the irs and big data gone bad

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bookkeeping data is notoriously unreliable. so why is the irs relying on it?

the ten-minute bookkeeping test (pdf)
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get the instant download:
the 10-minute bookkeeping test

by frank stitely
sk cpas

“please give me a copy of your 1099-misc forms.”

the irs agent was a 25-year-old woman, with only a couple of years of experience dealing with my client.

my client was the “how-dare-you-question-me?-i’m-a-taxpayin’,-god fearin’-american” type of client – one of those guys  who think the marlboro man is a wimp.

but he had a tax problem. he was being audited and he had thrown out all of his paper records when he moved his office.

missing 1099-misc

he didn’t have copies of his 1099-misc forms.  so he had his bookkeeper reprint them from quickbooks.  i gave them to the irs agent.

“mr. stitely, these 1099 forms don’t match what we have in our records.” read more →

irs to start fingerprinting tax pro’s

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fbi background checks for some ptin registrants.

the irs is airing proposed rules and user fees for fingerprinting and for taking the new competency examination.

total fees, counting the irs share and corporate contractors doing the work, are expected to be between $60 and $90 for fingerprinting and $100 and $125 for testing.

the irs share of the fingerprinting fee is expected to be $33 and $27 for the test.

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