Thursday May 18, 2023 - The Supreme Court released the much-anticipated decision in Polselli v. IRS. This case concerned a collection action of the IRS. So, I took a specific interest in this case.

While the case was often touted as a 4th amendment privacy case - that's not how the court saw it. Rather, the court decided the case based on Statutory construction, not Constitutional Law.

Chief Justice Roberts delivered the Opinion of the Court. The court held:

"The question presented is whether the exception to the notice requirement in §7609(c)(2)(D)(i) applies only where a delinquent taxpayer has a legal interest in accounts or records summoned by the IRS under §7602(a). A straightforward reading of the statutory text supplies a ready answer: The notice exception does not contain such a limitation."

In this case, [t]he parties did not argue, and the [court] below did not decide, the contours of [the phrase 'in aid of the collection.'"

Justice Jackson wrote a concurring opinion (joined by Justice Gorsuch) in which she writes "Congress did not give the IRS a blank check, so to speak, to do with as it will in the collection arena."

In her opinion, "the IRS is not necessarily exempt from notice obligations any time a tax-delinquency matter enters the collection phase."

I only wish more Justices joined in her opinion.

While the Court upheld the IRS's position in this instance, it did not define the full extent of the IRS's authority to issue summonses, implying that there could be future clarification on this matter.

Crypto-Tuesday May 16, 2023 - Today, I summarize an article I found in Mondaq - "Learning from the Ups and Downs of Cryptocurrency" by Jose Saa. From what I can find, Mr. Saa is a Compliance Officer who works within the Bank Secrecy Act (BSA) & Anti-Money Laundering (AML) compliance program..

The article starts by mentioning how cryptocurrencies like Bitcoin and Ethereum have become popular and can change the way we do things, especially in finance and technology. However, Mr. Saa points out that these digital currencies can also be unpredictable, and their values can change quickly.

One important lesson we can learn is the need to research and be careful before investing in cryptocurrencies. It's important to understand how they work, what affects their value, and the risks involved. Although there is a chance to make money, there's also a higher risk of losing it because of how fast the prices can go up and down.

The article also talks about the importance of rules and regulations for cryptocurrencies. Since they are not controlled by banks or governments, there should be some guidelines to protect people from scams and fraud. Finding the right balance between innovation and rules is crucial for the success of cryptocurrencies in the long run.

Another lesson is about keeping our digital money safe. Since cryptocurrencies exist only in computers, they can be targets for hackers and cybercriminals. Using strong passwords, secure storage methods, and other safety measures is important to protect our digital assets.

Additionally, the article mentions the importance of learning and staying informed. Cryptocurrencies are complicated, so it's essential to keep learning about them and staying updated on the latest news and best practices. This knowledge can help us make smarter decisions and be aware of the risks involved.

To sum it up, cryptocurrencies can be exciting, but they also come with risks. It's important to do research, follow rules, keep our digital money safe, and stay informed. By learning from the ups and downs of cryptocurrencies, we can make smarter choices and have a more secure and successful experience with digital money.

My take - investing in cryptocurrencies carries the same burdens and responsibilities as investing in traditional assets.

https://www.mondaq.com/unitedstates/fin-tech/1315228/learning-from-the-ups-and-downs-of-cryptocurrency

https://chartwellcompliance.com/team/juan-saa/

Monday May 15, 2023 - The tax preparation industry finds itself in a state of skepticism as the Internal Revenue Service (IRS) explores the creation of a government-run tax preparation option. The news has sent shockwaves through the industry, resulting in a significant decline in the stock prices of major players such as TurboTax and H&R Block. Amidst the buzz, industry voices are raising doubts, emphasizing that a direct-to-IRS e-file system would be redundant and not as free as it seems.

According to an article in The Wall Street Journal, the IRS is considering the implementation of a free tax preparation service directly through its platform. The aim is to simplify the tax filing process for millions of Americans while reducing their reliance on paid tax preparation services. However, skepticism arises regarding the feasibility and true cost of this proposed initiative.

"A direct-to-IRS e-file system will be redundant, and it will not be free—not free to build, not free to operate, and not free for taxpayers," said Derrick Plummer, a spokesperson for Intuit, the owner of TurboTax. Plummer's statement reflects the industry's concerns that the IRS's plan may not be as cost-effective or efficient as it appears.

Forbes reported on the significant impact this news has had on the stock prices of Intuit, the parent company of TurboTax, and H&R Block. Investors are expressing apprehension as the potential government-run option could potentially undermine the profitability of these private enterprises, which heavily rely on paid tax preparation services for revenue generation.

The Washington Post highlights the existing IRS Free File program, a partnership between the IRS and private tax preparation companies that currently provides free tax preparation services to eligible individuals. Critics argue that the program is riddled with complexities and loopholes, often leading taxpayers to inadvertently use paid options or pay for additional services.

Opponents of the IRS's proposed government-run tax preparation service argue that it would create redundancy in the market. They claim that the existing system, albeit imperfect, already provides viable options for taxpayers. The inclusion of a free, direct-to-IRS e-file system could be duplicative and unnecessarily costly.

It is important to note that the IRS's consideration of a government-run tax preparation option is still in its preliminary stages, and a final decision has yet to be made. Congressional approval, legislative changes, and significant support will be required for such a proposal to come to fruition.

As the story unfolds, the tax preparation industry, taxpayers, and lawmakers will closely scrutinize the IRS's actions and assess the potential consequences. The debate surrounding the viability and true cost of a government-run tax preparation service highlights the ongoing discussions regarding the accessibility and affordability of tax services for American taxpayers.

While the IRS's initiative aims to simplify the tax filing process, concerns raised by industry insiders suggest that a more nuanced analysis is necessary. As the skepticism surrounding the proposed government-run option grows, stakeholders will continue to evaluate its potential impact on the market and the broader implications for taxpayers.

https://www.wsj.com/articles/irs-weighs-creating-a-government-run-tax-prep-option-21647b65

https://www.washingtonpost.com/business/2023/05/15/irs-free-file/

https://www.forbes.com/sites/katherinehamilton/2023/05/15/irs-poised-to-weigh-in-on-free-tax-prep-service-sending-turbotax-and-hr-block-stocks-sliding/

Crypto-Tuesday May 2, 2023 - Today we explore the intersection of AI and blockchain and how these two technologies can work together to revolutionize various industries.

We discuss how AI can improve the efficiency and accuracy of smart contracts, while blockchain can ensure transactions are secure and transparent. Additionally, we explore how AI and blockchain can be used in healthcare to improve medical record-keeping, in cybersecurity to create stronger and more resilient systems, and in renewable energy to create more efficient and sustainable energy systems.

Attorney Steven A. Leahy also discusses the potential challenges and ethical concerns that must be considered when using these technologies. Join us as we delve deeper into the exciting possibilities of AI and blockchain and their potential impact on our world.

https://www.rollingstone.com/culture-council/articles/ai-needs-blockchain-1234726883/

https://cointelegraph.com/innovation-circle/ai-meets-blockchain-revolutionizing-smart-contracts-and-cryptocurrency

Thursday April 20, 2023 - Description: In this episode of Today's Tax Talk, we discuss Senator Joni Ernst's concerns about the IRS enforcement plan under President Joe Biden's Inflation Reduction Act and its potential impact on small businesses. We also explore the future of free filing options from the IRS and the possible development of a direct e-file program.

Join our host, [Your Name], as they break down:

0:00 - Intro

0:30 - IRS Enforcement Plan Controversy

1:45 - Senator Joni Ernst's Concerns

3:00 - Potential Impact on Small Businesses

4:15 - Future of Free Filing Options from the IRS

5:30 - Feasibility Study for Direct E-File Program

6:45 - Sen. Elizabeth Warren's Push for a Direct E-File Program

8:00 - Outro

Stay informed and make the most of your tax season with Today's Tax Talk! Don't forget to hit the subscribe button and the notification bell to get the latest updates on tax news and developments. Let us know your thoughts and questions in the comments below.

#IRSTaxNews #TodaysTaxTalk #FreeFilingOptions #TaxSeason #TaxUpdates #SmallBusinessTax #IRSEnforcement #TaxControversy #InflationReductionAct #TaxFiling #TaxAdvice #TaxPreparation #TaxPolicy #TaxReform #DirectEFile #ElizabethWarren #JoniErnst #TaxTips #TaxTime #TaxNews

https://www.cnbc.com/2023/04/20/there-are-lingering-questions-about-irs-free-tax-filing-options.html

https://www.foxnews.com/politics/ernst-accuses-irs-witch-hunt-against-small-businesses-audit-proposal

Wednesday April 19, 2023 - The Internal Revenue Service (IRS) has come under increased scrutiny in recent weeks, with Senator Ted Cruz calling for its abolishment and an IRS supervisory special agent seeking whistleblower protection to share information about alleged mishandling in the Hunter Biden investigation.

On Tax Day 2023, Senator Cruz criticized the IRS for what he perceives as the weaponization of the tax code and called for the agency to be abolished. He cited recent incidents, such as an IRS agent knocking on journalist Matt Taibbi's door on the day he was scheduled to testify before Congress, as evidence of the agency's continued harassment and political manipulation. Despite these concerns, the Biden administration and Democrats have allocated $80 billion in new funding to the IRS, potentially allowing for the hiring of up to 87,000 new employees.

In a separate development, an IRS supervisory special agent has sought whistleblower protection to share information with Congress about alleged mishandling and political interference in the ongoing criminal investigation into Hunter Biden.

The agent claims to have information that contradicts prior sworn testimony before Congress from a high-ranking political appointee, as well as examples of preferential treatment and political bias in the handling of the case.

Attorney Steven A. Leahy raises questions about the IRS's role, transparency, and fairness in society, and have led to calls for reform to ensure that the tax code is applied fairly to all Americans.

https://www.cnn.com/2023/04/19/politics/irs-whistleblower-hunter-biden/index.html

https://www.cruz.senate.gov/newsroom/press-releases/cruz-on-tax-day-stop-weaponization-of-tax-code-abolish-the-irs

Tuesday April 18, 2023 - The Internal Revenue Service (IRS) has made headlines for its recent improvements in customer service during the 2023 tax filing season. Thjey tell us this is proof $80 billion funding boost from the Inflation Reduction Act was good government . However, there's more to the story than meets the eye.

According to the U.S. Treasury, the IRS managed to provide live assistance to 87% of taxpayers' phone calls and answered 2.4 million more calls during the 2023 tax filing season.

While this is an obvious improvement, the real reason behind it is not the Inflation Reduction Act. In fact, the IRS hired 5,000 new staff members to answer calls in June 2022 BEFORE the Act was passed, as part of the $1.5 trillion Omnibus spending bill from March 2022.

Looking at the numbers, the new IRS employees managed to answer only 480 calls each. Assuming that these calls were spread over the 13-week tax season, each new employee handled just 37 calls per week. This raises questions about the efficiency of the investment and whether there are better ways to improve the IRS's customer service.

Republicans in the House have already tried to claw back the $80 billion in new IRS spending and may do so again in exchange for raising the $31.4 trillion U.S. debt ceiling.

The IRS's approach to solving its customer service issues by throwing huge amounts of taxpayer money at the problem is not the answer.

Attorney Steven A. Leahy critiques IRS claims on Today's Tax Talk.

https://www.reuters.com/world/us/us-irs-answered-24-million-more-taxpayer-calls-due-new-funding-2023-04-17/

https://federalnewsnetwork.com/budget/2022/03/congress-seeks-updates-on-state-of-the-federal-workforce-in-1-5t-omnibus-spending-deal/

Friday April 14, 2023 - Meet Attorney Michael Leonard. Attorney Leonard is a highly accomplished trial lawyer with over 30 years of experience in Federal and State criminal matters, civil employment, whistleblower, retaliation, qui tam, commercial, and injury cases.

He has successfully tried numerous cases to verdict in Federal and State courts across the country, achieving rare feats such as six complete not guilty verdicts on all counts in Federal criminal cases.

Attorney Leonard has also achieved impressive results in civil trials in Illinois State courts and Federal courts throughout the country. He has received recognition for his exceptional trial skills and legal expertise from various organizations.

Apart from his trial and litigation practice, Mike advises and represents clients on employment-related matters, and he is an Adjunct Professor of Trial Practice at the Northwestern Pritzker School of Law.

Attorney Steven A. Leahy interviews Attorney Michael Leonard on the Trust Radio Network.

https://www.leonardtriallawyers.com/

Wednesday April 12, 2023 – Tax Day is April 18th this year. Don’t let the change in the date get you. Yes, April 15th is usually Tax Day – but the rule is – and this rule goes for preforming most any act for tax purposes – if the deadline falls on a Saturday, Sunday or legal holiday it is considered timely if filed no later than the next day that is not a Saturday, Sunday or legal holiday. The term “legal holiday” means any legal holiday in the District of Columbia (and gets more complicated if the new due date falls on an official state holiday). April 15th falls on Saturday this year. And the next Monday April 17th is a legal holiday in DC (Emancipation Day). So, Tuesday April 18th is Tax Day.

Some taxpayers living overseas and disaster victims may have later filing deadlines. Alabama, California and Georgia storm victims now have until May 15 to file various federal individual and business tax returns and make tax payments.

If you won’t be able to file your tax return by April 18th. Consider asking for an extension. An extension will set a new deadline of October 16 (October 15 is a Sunday). To get an extension you simply complete IRS Form 4868. Form 4868 is a single page form with basic information: your name, address and social security number. The form also asks you to estimate how much tax you will owe?

BECAUSE your taxes are still due on April 18th! You don’t get an extension to pay your taxes, just to file the return. VERY IMPORTANT. If you fail to pay by April 18th, you will receive a failure to pay penalty. The Failure to Pay Penalty is 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid. The penalty won't exceed 25% of your unpaid taxes.

Here is something most don’t know. Taxpayers can use the Free File program to file an extension electronically – no matter what your income is. EVERY taxpayer can use free file to file an extension.

By filing an extension, you will avoid the failure to file penalty. That penalty is 5% of unpaid taxes for each month that a filing is late, with the penalty capped at 25% of unpaid taxes.

Oh, and most states don’t require you to file separate state extension forms if you don’t owe any additional taxes. When you file your state return, you only need to attach a copy of your federal extension form. If you owe state tax, you typically must file state tax extension to avoid penalties.

Attorney Steven A. Leahy explains filing extensions on Today’s Tax Talk.

https://www.cbsnews.com/news/taxes-2023-tax-extension-deadline-how-to/

https://www.irs.gov/newsroom/irs-kicks-off-2023-tax-filing-season-with-returns-due-april-18

https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

Crypto-Tuesday April 11, 2023 - Bitcoin, the world's largest cryptocurrency by market capitalization, has broken through the $30,000 threshold for the first time since May 2021, marking a significant milestone in its volatile price history.

The digital currency has been on a rollercoaster ride in recent years, experiencing extreme fluctuations in value, but this latest surge is a positive sign for investors who have held onto their bitcoin through the ups and downs.

The price surge can be attributed to several factors, including increased institutional adoption of bitcoin, growing interest from retail investors, and a renewed focus on the potential use cases of cryptocurrencies. Some experts also point to the current economic climate, which has seen governments around the world pumping trillions of dollars into their economies to counter the effects of the COVID-19 pandemic, as a key driver of the bitcoin price surge.

Speculation is rampent. Will Bitcoin continue the surge. Some speculate to $1 Million. Or, will it crash and burn to zero. Only time will tell.

Attorney Steven A. Leahy looks at the latest Bitcoin news on Today's Tax Talk.

https://coinflip.tech/markets

https://www.reuters.com/technology/bitcoin-pushes-past-30000-investors-eye-end-rate-rises-2023-04-11/

https://www.coindesk.com/business/2023/04/11/bitcoin-breaks-above-30k-for-first-time-since-june-2022/

Thursday April 6, 2023 - The Internal Revenue Service released its Inflation Reduction Act Strategic Operating Plan today. The plan is more of a "Wish List" or fantasy in my view.

All that was wrong with the IRS will now be made right.

According to the IRS Plan:

The Plan is structured to achieve five objectives, which will be accomplished through a series of initiatives

and projects aligned to each.

1. Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives

for which they are eligible

2. Quickly resolve taxpayer issues when they arise

3. Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to

address the tax gap

4. Deliver cutting-edge technology, data, and analytics to operate more effectively

5. Attract, retain, and empower a highly skilled, diverse workforce and develop a culture that is better

equipped to deliver results for taxpayers

The new Commissioner, Danny Werfel, calls it "a vision for the future of Federal tax administration."

The purpose of the plan was to lay out how the IRS was going to spend the $80 Billion from the Inflation Reduction Act. But the plan doesn't include any numbers until page 131. And then only in a high level, general, and abstract way.

Let's not forget the IRS scandals of the 2010's. Not only the targeting of conservative organizations, but the capricious waste of taxpayer money for lavish conferences that included 10s of thousands of dollars for video parodies of Star Trek and Gilligan’s Island.

Attorney Steven A. Leahy critiques the new IRS report on Today's Tax Talk.

https://www.irs.gov/about-irs/irs-inflation-reduction-act-strategic-operating-plan

https://thehill.com/homenews/ap/ap-business/irs-pledges-better-customer-service-no-new-agents-with-guns/

https://www.cnn.com/2013/06/06/politics/congress-irs-waste/index.html

Wednesday April 5, 2023 - Danny Werfel was sworn in as the 50th Commissioner of the Internal Revenue Service on Tuesday April 4, 2023. While Commissioner Werfel was sitting through his Senate confirmation hearing, the Treasury Department missed its self-appointed deadline to present a plan to the American people on just how they planned to spend the nearly $80 Billion in new funding for the IRS provided by the Inflation Reduction Act. Remember the Inflation Reduction Act? The Act that was passed without a single Republican vote.

Danny is not new to the IRS. He was appointed as the Acting Commissioner of the Internal Revenue Service (IRS) on May 22, 2013, by then-President Barack Obama. Right after the IRS was caught targeting conservative groups seeking tax-exempt status and the previous Commissioner, Steven Miller resigned under a cloud. Think Lois Learner.

Commissioner Werfel has promised the IRS workforce they will receive the credit they deserve. The IRS workforce “has risen to the occasion and delivered for taxpayers with limited resources.” The additional $80 Billion will allow the IRS to treat every taxpayer fairly.

Don’t worry, everything you ever thought bad about the IRS, will be just great. This filing season has been better than the previous filing seasons. You know the filing seasons when the IRS employees stayed home and no one was there to process returns or answer the phone.

Attorney Leahy welcomes IRS Commissioner Danny Werfel on Today’s Tax Talk.

https://www.govexec.com/management/2023/04/new-irs-chief-growing-workforce-will-transform-agency-armed-only-their-calculators/384806/

https://www.irs.gov/about-irs/commissioner-danny-werfel

https://federalnewsnetwork.com/reorganization/2023/04/irs-commissioner-danny-werfel-outlines-plan-to-transform-agency-with-historic-investment/

Crypto-Tuesday April 4, 2023 - In December 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs Inc. (Ripple), the company behind the XRP cryptocurrency, claiming that XRP was an unregistered security. Ripple has denied the allegations and the case has been closely watched by the cryptocurrency industry. The outcome of the case could have far-reaching consequences for the regulation of cryptocurrencies in the United States and around the world.

The SEC's complaint alleges that Ripple conducted an unregistered securities offering when it sold XRP to investors. According to the complaint, XRP was sold as an investment contract, and therefore, XRP is a security under U.S. law. The SEC is seeking to recover all profits obtained by Ripple and its founders as a result of the alleged sale of unregistered securities, as well as civil penalties.

Ripple has vigorously denied the allegations, arguing that XRP is not a security and that the SEC's case is misguided. Ripple contends that XRP is a digital asset that serves as a medium of exchange and a store of value, and therefore, is not subject to the same regulations as securities.

The case has generated a great deal of interest and concern. Many observers believe that the outcome of this case will have far-reaching consequences for the regulation of cryptocurrencies. If the SEC prevails, it will set a precedent for other cryptocurrencies to be classified as securities, which would subject them to stricter regulation and potentially stifle innovation within the industry. If Ripple prevails, the SEC’s position that all cryptocurrencies, other than Bitcoin, are securities will suffer a major setback. Either way, a decision in this case will lead to greater regulatory clarity and certainty.

The case has also raised questions about the SEC's approach to regulating cryptocurrencies. Some within the industry have criticized the SEC for its lack of clarity regarding the regulatory status of cryptocurrencies, arguing that the agency has been slow to provide guidance and has not kept pace with the rapid growth and evolution of the industry. Others have criticized the SEC for its perceived inconsistency in its approach to regulating cryptocurrencies, with some arguing that the agency has been overly aggressive in its enforcement actions against certain projects while ignoring others.

Regardless of the outcome of the case, it is clear that the regulatory landscape for cryptocurrencies is still evolving and uncertain. While some countries have taken a more progressive approach to regulating cryptocurrencies, the United States has been slower to provide clear guidance and establish a regulatory framework for the industry. The Ripple vs. SEC case is just one example of the challenges and uncertainties that the cryptocurrency industry faces as it seeks to mature and gain wider acceptance.

https://finbold.com/ripple-v-sec-court-case-update-as-of-april-3-2023/

https://forkast.news/headlines/sec-charges-beaxy-cryptocurrency-platform-for-violating-securities-laws/

https://bitcoinist.com/ripple-sec-xrp-foia-request-jp-morgan-delayed/

https://www.jdsupra.com/legalnews/cryptocurrency-companies-should-expect-2656781/

Thursday March 23, 2023 – On this show, I have spoken openly about the new 1099-k information reporting rules for Third party settlement organizations – I think they stink. Recently, the IRS updated their “frequently asked questions about Form 1099-K. We all remember the empty promises made by supporters of this expansion. “This really doesn’t change anything, as these transactions are already taxable.” And “Only payments for goods and services will be effected.”

Now we know, and the IRS has acknowledged, that almost all transactions involving third-party settlement organizations will come under scrutiny and require “Accounting” to explain close to every transaction.

For example, The FAQ page provides guidance on how to report the sale of personal items on Form 1099-K, as well as how to report multiple Forms 1099-K and Forms 1099-K received in error. Taxpayers can report offsetting entries on Schedule 1 for each Form 1099-K they receive separately, or they can combine the Forms 1099-K they've received.

The FAQ also address the question “During the year, I sold my personal guitar for $800 on a social media platform's marketplace and I received Form 1099-K. I purchased the guitar several years ago for $3,000. How do I prove how much I paid if requested by the IRS?” This is what I have been saying from the beginning, and why I thought the explanations given by the IRS, Congress, and their media mouthpieces were, shall we say, disingenuous.

In 2021 the IRS processed 4.7 Billion (with a B) information returns. In 2020 the IRS destroyed 30 million without processing them, because they did not have the resources. With this HUGE increase, look for more delays. Although the delays generally come from paper returns, and the IRS is doing all they can to BAN paper returns.

Attorney Steven A. Leahy looks over the new 1099-K FAQ sheet on Today’s Tax Talk.

https://www.accountingtoday.com/news/irs-issues-new-guidance-on-form-1099-k

https://www.irs.gov/pub/taxpros/fs-2023-06.pdf

Wednesday March 22, 2023 - The Inflation Reduction Act provided the IRS with a boat load of money. The Act also put aside $15 million for the IRS to conduct a study to find out how to create a program that allows Americans to file their taxes for free.

As we all know. There is nothing more expensive than when the government gives something away. This free tax filing plan was the brain child of Senator Elizabeth Warren. She insisted this provision be included in the Act before she would support it.

What most of the public does not know is - there is already a free file program at the IRS. If you make less than $73,000.00 you can file your 2022 federal tax returns for free.

However, the Free File progrqam is not used by many taxpayers. According to the IRS, More than 100 million people, almost 70% of all taxpayers, qualify for Free File. Since the program launched the Free File program in 2003, according to the IRS, less than 2% of eligible Americans have taken advantage of it.

Attorney Steven A. Leahy talks about the IRS Proposal to prepare tax returns for all Americans.

https://thehill.com/business/3912232-conservative-coalition-takes-aim-at-bidens-irs-run-tax-preparation-service/

https://www.clickondetroit.com/news/national/2022/09/07/irs-gets-15m-to-find-out-if-it-can-create-online-tax-return-system-so-americans-can-file-for-free/

https://www.irs.gov/newsroom/irs-free-file-launch-aims-to-save-taxpayers-hard-earned-dollars

https://www.cnet.com/personal-finance/taxes/irs-free-file-lets-most-americans-file-their-taxes-for-free/

Crypto-Tuesday March 21, 2023 - The Supreme Court is set to hear arguments in its first case involving cryptocurrencies. The case involves Coinbase, one of the leading crypto exchanges, attempting to compel arbitration for a pair of class action lawsuits against it.

Abraham Bielski is suing Coinbase for $31,000 he lost after providing a scammer access to his account. Suski v. Coinbase concerns a million-dollar sweepstakes event hosted by Coinbase in 2021. In that case, plaintiffs allege they were misled.

The outcome of the case could have major implications for how Crypto companies can resolve disputes. As more class action lawsuits are filed against crypto ledgers, the Supreme Court's decision in this case could have major ramifications.

Ripple vs SEC is also an important case reaching the end of litigation. We have covered this case in this space. The question before the court is whether XRP is a security, as the SEC alleges. If it is, Ripple violated the registration provisions of the Securities Act of 1933 and many other cryptocurrencies are also securities and subject to SEC regulation.

Attorney Steven A. Leahy reviews these cases on Today’s Tax Talk.

https://coinflip.tech/markets

https://www.washingtonexaminer.com/policy/courts/supreme-court-takes-up-first-cryptocurrency-case

https://www.irs.gov/newsroom/irs-issues-guidance-seeks-comments-on-nonfungible-tokens

https://fortune.com/crypto/2023/03/21/ripple-xrp-sec-landmark-court-case-digital-assets/

Monday March 20, 2023 – The Biden Administration’s proposed budget for 2023 is out. The budget proposes increasing spending from $5.8 Trillion to $6.7 Tillion. It’s clear from the administration’s proposals, they are not serious about engaging in any rational discussions on the budget and the debt ceiling.

In addition, the budget drastically increasing the tax rate for those with incomes higher than $500,000 a year and a minimum tax for those with more than $100 million in wealth. The budget also increases corporate rates from 21% to 28%, as well as increase taxes on stock buybacks, investment income and certain federal agencies.

But the BIGGEST surprise in the budget is the boost to the IRS budget. Remember, the Inflation Reduction Act has already provided the IRS with $80 billion for hiring 87,000 additional employees over the next decade, transforming it into one of the largest government agencies. This new budget would add an additional $43 BILLION. The baseline increases by 15% to $14.1 Billion PLUS another $29.1 billion in “mandatory funding for enforcement and operations.”

I have to repeat Rep. Jason Smith’s, chairman of the House Ways and Means Committee, question. “Is this a joke?

Attorney Steven A. Leahy goes over the Biden Administration’s new budget on Today’s Tax Talk.

https://elamerican.com/biden-wants-more-money-for-the-irs-43-billion-this-time/

https://waysandmeans.house.gov/never-enough-biden-budget-seeks-absurd-43-2-billion-for-irs-despite-receiving-unprecedented-80-billion-windfall-just-last-year/

Thursday March 16, 2023 - The Inflation Reduction Act was passed in August 2022.  The Act provided $80 Billion over 10 years.  The vast majority of those funds are directed to enforcement almost 60%.  Only $3.2 billion – under 4% - is going to taxpayer services – like answering the phone.  

Today the Taxpayer Advocate, Erin Collins, wrote “The IRA allocated the funds in a manner that does not address the needs of U.S. taxpayers, including individuals, families, and businesses,” Collins continued, “The additional funding provided by the IRA, while appreciated and welcomed, is disproportionately allocated for enforcement activities and should be reallocated to achieve a better balance with taxpayer service needs and IT modernization. We need to put taxpayers first.” 

This space recently reported the IRS missed the 6 month deadline, imposed by Treasury Secretary Janet Yellen, to provide a plan on how the IRS intends to spend the IRA money.  The IRS reported that it “expects to deliver the plan to the Secretary in [the] coming weeks.”  That doesn’t mean they aren’t already spending 

Attorney Steven A. Leahy looks at the IRS’ progress on this episode of Today’s Tax Talk.

https://www.pgpf.org/blog/2023/03/would-increased-funding-for-the-irs-narrow-the-tax-gap

https://thehill.com/business/3903701-taxpayer-advocate-urges-congress-to-reconsider-80-billion-irs-funding-boost/

https://www.irs.gov/pub/image/21dbmainchart.png

https://www.boropark24.com/news/irs-hires-5-000-customer-service-agents

Crypto-Tuesday March 14, 2023 – Pi Day – Now that the Government has effectively guaranteed every deposit in every bank in America, Cryptocurrency prices have seen a sharp increase., Coinbase (COIN 5.88%) rose 11.9% on Tuesday and other cryptos such as Cardano, Ethereum and Bitcoin also saw double-digit gains. 

The Consumer Price Index report released Tuesday morning showed that inflation cooled down mildly in February.  There are expectations that the banking crisis will also have an effect on the Fed’s interest rate targets. This could prove a benefit for both the crypto market and digital currencies themselves.

The recent surge has brought some digital tokens back to levels last seen at various points throughout 2021, while others have seen double-digit gains over the past two days. 

I think it is unrealistic to expect the economy to have a quick rebound.  Did you notice the banks are failing??  That is never a sign of a strong economy.  

There is lots of bullish talk out there.  Again, did you notice the banks are failing?

Attorney Steven A. Leahy takes a look at the Crypto market on Today’s Tax Talk.

https://coinflip.tech/markets

https://www.fool.com/investing/2023/03/14/why-bitcoin-ethereum-cardano-coinbase-are-soaring/

https://blocklr.com/cryptocurrency/state-of-cryptocurrency-today/

https://www.cnbc.com/amp/2023/03/14/moodys-cuts-outlook-on-us-banking-system-to-negative-citing-rapidly-deteriorating-operating-environment.html

https://www.msn.com/en-us/money/companies/barney-franks-bank-tanks-government-is-just-the-word-for-the-businesses-we-shut-down-together/ar-AA18CNTz

Monday March 13, 2023 – The Administration has been clear (??) the Inflation Reduction Act funding to the IRS, almost $80 billion, will not be used to Audit those making less than $400,000 per year.  Or will it.

Last week the new Commissioner of the IRS said, I think unequivocally, that the Inflation Reduction Act money will not be used to audit those taxpayers.  But, on Friday March 10th, Treasury Secretary Yellen appeared before the House Ways and Means Committee and admitted that more than 90% of any new audits supported by that money will be used to audit small businesses and individuals making less than $400,000 per year. 

If you listened closely over these past months, you knew this was the case.  There was always some “wiggle room,” as Senator Crapo put it.  And trying to get a straight answer was always met with obfuscation.

Now, I think the truth is out.  Will it make a difference?

Attorney Steven A. Leahy goes over this new information on Today’s Tax Talk.

https://www.cnn.com/2022/08/10/politics/yellen-new-irs-funding-audits/index.html

https://finance.yahoo.com/video/yellen-appears-admit-90-irs-201955117.html