2020 Year in Review: COVID-19, Cryptocurrency and Other Tax Issues that Could Lead to Trouble in 2021

For many people, 2020 was a year that can’t be forgotten soon enough. But, while 2020 was difficult and indeed tragic for many families, it is important to take the lessons we learned during the year with us into 2021.

Throughout 2020, we published several articles on our blog discussing important developments and insights in the area of federal tax law compliance. Here is a look back at some of the top articles published by Virginia tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group:

Did You Timely and Accurately File Your 2020 Federal Income Tax Return?

While the IRS delayed Tax Day until July 15 in 2020, many taxpayers still struggled to meet their filing and payment obligations on time. Since the IRS can audit tax returns for several years after they are filed, it is important for all taxpayers to make sure that they haven’t made mistakes that could lead to problems down the line. Learn more: 2020 Tax Returns are Due. Are You at Risk for Being Audited by the IRS?

Are You at Risk for Allegations of Cryptocurrency Tax Fraud?

Cryptocurrency tax compliance has been a key focus area for the IRS in recent years, and all indications are that this will continue to be the case in 2021. While the IRS sent “education letters” to thousands of cryptocurrency investors in 2020, all individuals and businesses that own – or have owned – digital currencies need to make sure that they meet their tax reporting and payment obligations. Learn more:

• IRS Sends Another Round of Warning Letters to U.S. Cryptocurrency Investors

• Are You at Risk for Facing Allegations of Cryptocurrency Tax Fraud?

Do You Need to Disclose Your Offshore Bank Accounts to the IRS?

Similar to cryptocurrency, offshore bank accounts present unique tax compliance issues for individual and corporate taxpayers as well. If you or your company owns offshore bank accounts, then there is a very good chance that you owe reporting obligations in addition to your standard annual income tax returns. Learn more:

• A Guide on When to Disclose Offshore Bank Accounts

• Should You Use the IRS’s Voluntary Disclosure Practice if You are Behind on Your Federal Tax Obligations?

Are You (or is Your Business) a Potential IRS Target in 2021?

During 2020, the IRS also signaled that it intends to place additional emphasis on targeting small business owners, self-employed individuals and other high-income taxpayers. As a result, if you fall into one of these categories, it will be especially important for you to ensure that your tax filings do not put you at risk for facing an audit or investigation in 2021. Learn more:

• IRS to Step Up Audits Targeting High-Income Taxpayers

• Small Businesses in Virginia Could Soon Be Facing More IRS Scrutiny

What are the New Tax Rates, Exemptions and Deductions for 2021?

Each year, the IRS issues updated regulations regarding the applicable tax rates, exemptions and deductions. The updates for 2021 were released in October. Learn more: These are the New Tax Rates, Exemptions and Deductions for 2021.

Request a Consultation with Virginia Tax Attorney Kevin E. Thorn, Managing Partner of Thorn Law Group

If you have questions about federal tax law compliance, or if you have concerns about the possibility of facing an IRS audit or investigation, you can contact us to arrange a confidential consultation with Virginia tax attorney and Managing Partner Kevin E. Thorn. To schedule an appointment at Thorn Law Group, please call 703-752-3752, email ket@thornlawgroup.com or tell us how we can reach you online today.