When you file your 2020 tax returns, will you be meeting your obligations for yet another year? Or, will you be exposing yourself to the risk of an Internal Revenue Service (IRS) audit or investigation? Oversights and other mistakes can lead to IRS scrutiny—especially when these mistakes involve the IRS’s current enforcement priorities.

In March of 2020, the Internal Revenue Service (IRS) began sending warning letters to micro-captive insurance companies and their clients. This initiative was based on information the IRS received from various sources indicating that some micro-captive insurance companies were engaging in abusive practices—with attendant tax fraud implications.

It is a new year, and that means that it is tax time. While Tax Day is not until April 15, U.S. taxpayers must start preparing now in order to ensure that they will be able to file their state and federal returns by the due date. But, for taxpayers who own offshore assets, their federal returns may not be all they need to file in 2021. As New Jersey offshore tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group explains, these taxpayers may need to file an FBAR and IRS Form 8938 as well.

Cryptocurrency investors must report all taxable income from mining, sales, and other transactions on their annual tax returns, and they must pay all income taxes that are due. However, these are not the only requirements that exist at the federal level. As New Jersey tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains, for cryptocurrency held in offshore accounts, reporting obligations under the Bank Secrecy Act and the Foreign Account Tax Compliance Act (FATCA) may apply as well.