Whether you are a Virginia resident who spends time working abroad or you have accounts or investments offshore, you need to make sure you dutifully meet your obligations to the IRS. Underreporting foreign income and assets can trigger an IRS audit or investigation, and both underreporting and underpayment can lead to steep penalties.

The Internal Revenue Service (IRS) recently issued an update regarding taxpayers’ digital asset reporting requirements for 2023. As the IRS explains, “taxpayers . . . must again answer a digital asset question and report all digital asset-related income when they file their 2022 federal income tax return, as they did for fiscal year 2021. The term ‘digital assets’ has replaced ‘virtual currencies,’ a term used in previous years.”

It’s a New Year, and that means Tax Day isn’t far away. For U.S. taxpayers who hold offshore accounts, Tax Day brings filing requirements above and beyond submitting an annual income tax return.

Each year, we publish dozens of articles on our blog discussing topics of interest to individual and corporate taxpayers in Virginia. In 2022, we covered topics ranging from Paycheck Protection Program (PPP) fraud and cryptocurrency tax evasion to the rules regarding charitable distributions and offshore bank accounts. Here are some of the highlights.

Taxpayers who fail to timely meet their obligations to the IRS can face immediate penalty liability. Penalties for late filings and payments are in addition to the interest that accrues on any taxes owed, and interest accrues on taxpayers’ penalty liability as well.