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IRS writes taxpayers with virtual currency transactions

The IRS began in July to send compliance letters to taxpayers the Service identified as having failed to properly report income and pay resulting tax from virtual currency transactions. More than 10,000 taxpayers were expected to receive the letters by the end of August. The announcement in IRS News Release IR-2019-132 did not say how the IRS had identified the transactions and taxpayers other than by "various ongoing IRS compliance efforts." The IRS launched a virtual currency compliance campaign a year earlier as one of several new campaigns by its Large Business & International division. In February 2018, virtual currency exchange Coinbase notified about 13,000 customers that it would provide the IRS information about their accounts and transactions in 2013 through 2015 in response to a "John Doe" summons granted to the IRS in 2017 by a district court.

Nonemployee compensation gets its own Form 1099

The IRS released a draft of its new Form 1099-NEC, Nonemployee Compensation, which will take the place of Form 1099-MISC, Miscellaneous Income, for reporting nonemployee compensation. The Protecting Americans From Tax Hikes Act, P.L. 114-113, enacted Sec. 6071(c), which requires that, starting with payments made in 2017, nonemployee compensation be reported to the IRS on or before Jan. 31 following the year of payment. Other types of income reported on Form 1099-MISC, however, do not require filing of that form until March 31 following the year of payment. The new form will allow Forms 1099-MISC reporting only the other types of income to be filed by the later deadline. Form 1099-NEC will be required for payments of nonemployee compensation made in 2020 and following.

Olson offers winding 'Taxpayer Roadmap'

In one of her final acts before retiring as national taxpayer advocate, Nina Olson announced publication by the Taxpayer Advocate Service of a labyrinthine, subway-diagram-styled "Taxpayer Roadmap 2019: An Illustration of the Modern United States Tax System." The color-coded route wends through "stations" of sorting, processing, action, screening, assessment, appeals, collection, and litigation, with many detours along the way. See the map online and available as a PDF at It is also available in print by calling 800-829-3676 and requesting Publication 5341, The Taxpayer Roadmap.


Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.


Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.