Income Tax News

Over 120 officials of the Income Tax Department are conducting searches at multiple locations in Andaman and Nicobar Islands, a senior official said on Saturday.

The searches started on December 4 over suspected irregularities in filing returns by some businessmen in the archipelago, and are underway, the I-T official said.

“An I-T team from Kolkata is conducting raids in several offices in Church Road, Phoenix Bay, Marine Hills, Aberdeen Bazaar and Dilanipur areas of Port Blair. Search operations are also underway in Babu Lane and Junglighat areas,” the official said.

Similar raids are underway in offices on MG Road and Gurdwara Lane, he said.

“It is a well-coordinated operation and we will reveal the findings soon. We suspect irregularities in filing returns and GST-related issues,” the official said.

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A team of over 120 I-T officials from Kolkata landed at Veer Savarkar International Airport here on December 4, and they also alerted the airport officials to prevent the businessmen whose offices are being searched from boarding flights to leave Port Blair, another source in the department said.
Originally Appeared Here

WASHINGTON — Former White House adviser Peter Navarro, who served prison time related to the Jan. 6 attack on the U.S. Capitol, will return to serve in Donald Trump’s second administration, the president-elect announced Wednesday.

Navarro, a trade adviser during Trump’s first term, will be a senior counselor for trade and manufacturing, Trump said on Truth Social. The position, Trump wrote, “leverages Peter’s broad range of White House experience, while harnessing his extensive Policy analytic and Media skills.”

The appointment was only the first in a flurry of announcements that Trump made on Wednesday as his presidential transition faced controversy over Pete Hegseth, Trump’s choice for Pentagon chief. Hegseth faces allegations of sexual misconduct, excessive drinking and financial mismanagement, and Trump has considered replacing him with another potential nominee.

As he works to fill out his team, Trump said he wanted Paul Atkins, a financial industry veteran and an advocate for cryptocurrency, to serve as the next chairman of the Securities and Exchange Commission. He wrote on Truth Social that Atkins “recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before.”

Trump also said he was changing course on his choice for White House counsel. He said his original pick, William McGinley, will work with the Department of Government Efficiency, which will be run by Elon Musk and Vivek Ramaswamy with the goal of cutting federal spending. Now David Warrington, who has worked as Trump’s personal lawyer and a lawyer for his campaign, will serve as White House counsel.

In addition, Trump announced the selections of former Rep. Billy Long of Missouri as IRS commissioner; Daniel Driscoll, an Army veteran who was a senior adviser to Vice President-elect JD Vance, as Army secretary; Jared Isaacman, a tech billionaire who conducted the first private spacewalk on Elon Musk’s SpaceX rocket, as NASA administrator; and Adam Boehler, a lead negotiator on the Abraham Accords team, as special presidential envoy for hostage affairs.

Navarro was held in contempt of Congress for defying a subpoena from the House committee that investigated Jan. 6. Sentenced to four months in prison, he described his conviction as the “partisan weaponization of the judicial system.”

Hours after his release in July, Navarro spoke on stage at the Republican National Convention, where he told the crowd that “I went to prison so you won’t have to.”

Navarro, 75, has been a longtime critic of trade arrangements with China. After earning an economics doctorate from Harvard University, he worked as an economics and public policy professor at the University of California, Irvine. He ran for mayor of San Diego in 1992 and lost, only to launch other unsuccessful campaign efforts, including a 1996 race for Congress as a Democrat.

During Trump’s initial term, Navarro pushed aggressively for tariffs while playing down the risks of triggering a broader trade war. He also focused on counterfeited imports and even helped assemble an infrastructure plan for Trump that never came to fruition.

Navarro often used fiery language that upset U.S. allies. In 2018, after a dispute between Trump and Canadian Prime Minister Justin Trudeau, Navarro said “there’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door.”

Canadians were outraged, and Navarro later apologized.

Issacman has reserved two more flights with SpaceX, including as the commander of the first crew that will ride SpaceX’s mega rocket Starship, still in test flights out of Texas. He said he was honored to be nominated.

“Having been fortunate to see our amazing planet from space, I am passionate about America leading the most incredible adventure in human history,” he said via X.

Trump kept rolling out positions on Wednesday afternoon. He announced Gail Slater as assistant attorney general for the Justice Department’s antitrust division. Trump wrote on Truth Social that “Big Tech has run wild for years, stifling competition in our most innovative sector.”

Slater worked for Trump’s National Economic Council during his first term, and she’s been an adviser to Vance.

Trump also said Michael Faulkender would serve as deputy treasury secretary. A professor at the University of Maryland’s Smith School of Business, Faulkender was the Treasury Department’s assistant secretary for economic policy during Trump’s initial term. He has also been the chief economist at the America First Policy Institute, a think tank formed to further the Trump movement’s policy agenda.

Outside the White House, Trump said that he had asked Michael Whatley to remain on as chair of the Republican National Committee. Whatley ran the committee during the election along with Lara Trump, the wife of Trump’s son Eric.

—

Originally Appeared Here

The Central Board of Direct Taxes (CBDT) has announced that the income tax return filing deadline has been extended for taxpayers who have international transactions and are required to furnish reports under Section 92E. The ITR filing deadline extension will mostly be applicable to entities taking part in international or specified domestic transactions. The ITR filing deadline for these taxpayers has been extended by 15 days from November 30, 2024, to December 15, 2024, for FY 2023-24 (AY 2024-25).

According to the press release: The due date for furnishing the return of income u/s 139 (1) of the Income-tax Act, 1961 (the Act) in the case of assessee who is required to furnish a report referred in Section 92E is the 30th day of November of the assessment year i.e. 30.11.2024 for the AY 2024-25. The due date, originally set as 30th November 2024, for assesses covered under clause (aa) of the Explanation 2 to sub-section (1) of Section 139, has now been extended to 15th December 2024 by CBDT circular no 18/2024.

— IncomeTaxIndia (@IncomeTaxIndia)
The CBDT issued the press release on November 30, 2024.

Harsh Bhuta, Partner, Bhuta Shah & Co says, “The due date for furnishing the return of income in case of Assessees that are subject to Transfer Pricing (TP) audit in respect of its international transactions under Section 92E of the Income-tax Act, 1961 and are required to file the report in Form 3CEB is ideally 30 November of the Assessment Year (AY). The Central Board of Direct Taxes (CBDT) has extended the due date of furnishing return of income for the AY 2024-25 [Financial Year – 2023-24] in case of above mentioned Assessees from the erstwhile 30 November 2024 to 15 December 2024 vide Circular No. 18/2024 dated 30 November 2024. This extension will be a sigh of relief for those l Assesses subject to TP audit who may be facing issues while complying with process of filing return, will save the interest cost on belated filing and enable the Assessees to carry forward its losses if the return is filed on or before 15 December 2024.”

Mihir Tanna, Associate Director – Direct Tax S K Patodia & Associates LLP says, “Person involved in international or specified domestic transactions is required to get a report from a CA in Form 3CEB. Due date to file ITR is extended to 15th December for said persons for whom due date was 30th Nov 2024 for AY 2024-25. It appears that one of the reasons for extending the due date is to give the impact of safe harbour rules. CBDT extended safe harbour rules for AY 2024-2025 vide notification dated 29th Nov 2024. However, form 3CEFA (application for opting safe harbour) is still not enabled at income tax portal for filing it online. Vide notification No. 01/2024 Dated: 26.02.2024, income tax has notified Form 3CEFA to be furnished electronically. We can expect that in the next few days, said forms will be enabled at the income tax portal and eligible persons will be able to file it before filing income tax return as required by Rule 10TE. Further, Sec 92CB was amended by Finance Act 2020 to provide certainty with respect to the attribution of income in case of a non-resident person to the PE to be clearly covered under the provisions of the safe harbour rules. However, provisions of income tax rules have not yet been amended to provide for such determination.”

Who is required to file report under Section 92E?

Entities involved in specified domestic and/or international transactions in any financial year are required to obtain a report from a chartered accountant. This report has to be submitted to the income tax department by October 31 via Form 3CEB.

Section 92E will be applicable on the transactions which meet certain specified criteria.

For instance transactions such as buying, selling or leasing tangible or intangible property, business transactions leading to income, profits, losses or gains, lending or borrowing of money etc.

The aggregate of such transactions done by the assessee must not exceed Rs 20 crore. If the threshold limit is crossed, then transfer pricing rules must be complied with by the taxpayers.

Penalty for not filing report under Section 92E

According to income tax laws, a penalty of Rs 1 lakh is levied on the entities who fail to file the report of the chartered accountant by the October 31 due date.
Originally Appeared Here

Saving for retirement is becoming a loftier goal every day, and many Americans are entering that new phase of life without enough savings to cover expenses and relying fully on Social Security benefits. This is why Congress has made a few sweeping changes to the country’s retirement system, including several updates to 401(k) plans. These changes aim to help future retirees have a smoother transition between their working lives and retirement.

The changes come in the form of the “Secure 2.0” Act, an update of the original piece, and most of the changes included in it will go into effect in 2025.

Why is this update so important? According to a CNBC survey, which polled about 6,700 adults in early August, roughly 4 in 10 American workers say they are behind in retirement planning and savings, primarily due to debt, not enough income or getting a late start.

This is a discouraging figure, especially considering that 401(k) plans are “the primary way most Americans prepare for retirement”, of we listen to Dave Stinnett, Vanguard’s head of strategic retirement consulting. He also stated that the accounts can work “very, very well” when designed properly, and that seems to be the main issue, they are not properly utilized,

The first relevant change that will be implemented is an increase in catch up contributions. In 2025, employees can defer $23,500 into 401(k) plans, up from $23,000, and those ages 50 and older can make up to $7,500 in catch-up contributions on top of the $23,500 limit.

An additional increase to catch-up contributions will also take place for employees ages 60 to 63. As certified financial planner Jamie Bosse, senior advisor at CGN Advisors in Manhattan, Kansas explains, that this collective will have an additional to $11,250, about a 14% increase in their contributions.

Vanguard’s 2024 How America Saves report, based on data from 1,500 qualified plans and nearly 5 million participants, discovered that only 14% of employees maxed out 401(k) plans in 2023, and only an estimated 15% of workers made catch-up contributions in plans that allowed it during 2023. This sadly means that the increases, though nice in theory, may not be as utilized as experts would like for the general public

Other changes by the Secure 2.0 Act

Another piece fo good news, this time for part-time workers, is that now they will have increased access to 401(k) and 403(b) plans. The change started being implemented in 2024, when employers were required to extend plan access to part-time employees who worked at least 500 hours annually for three consecutive years. In 2025 the threshold drops to two consecutive years.

Stinnett praises the measure, calling it “a very good thing for long-term part-time workers who may have struggled to qualify for 401(k) eligibility.”

Of the 73% of civilian workers that had access to workplace retirement benefits, only 56% participated in these plans, according to the U.S. Bureau of Labor Statistics, which is a very low number considering that they are the main income during retirement. This measure will hopefully rise those numbers

Another important update is that the new 401(k) plans will have mandatory auto-enrollment. This will impact all new plans established after Dec. 28, 2022. They must also include a minimum 3% employee deferral rate.

Alicia Munnell director of the Center for Retirement Research at Boston College emphasizes “Coverage is my thing. It’s important that people have coverage no matter where they go (including from full-time to part-time at the same job). It’s unequivocally a positive step to take. More people will join, and more people will have savings because of that.”

Originally Appeared Here

If you itemize, strategize.

© Stone’s Throwe Photo/stock.adobe.com

Government services like roads, schools, and social programs don’t come free. To fund these necessities, federal, state, and local governments rely on taxes. Whether it’s income, property, or sales taxes, you and everyone else must contribute their share.

Because you pay taxes at the state and local level, the Internal Revenue Service (IRS) allows you to deduct state and local taxes (SALT) from your taxable income when filing your federal tax return. You can deduct state and local taxes only if you itemize your deductions using Form 1040 Schedule A.

Most filers take the standard deduction, which allows you to subtract a specific amount (for the 2024 tax year, it’s $14,600 for single filers; $29,200 for those married filing jointly) from your taxable income. But if you’ve run the numbers and determined that you would pay less in tax by itemizing, you have that option.

SALT allowed as itemized deductions include state and local income taxes (or state and local sales tax), state and local real property taxes, and state and local personal property taxes.

Key Points

• State and local taxes—such as income, real property, and personal property—are deductible if you itemize deductions using Form 1040 Schedule A.
• Some states have no income tax, while others have additional income tax at the local (county or city) level.
• The Tax Cuts and Jobs Act limits the state and local tax (SALT) deduction to $10,000 for individuals and couples filing jointly ($5,000 for those married filing separately).

State and local income taxes

Most states tax their residents’ income. If you’re a worker who receives a W-2, state and local taxes are typically deducted directly from your paycheck.

Twelve states tax personal income at flat rates (no matter how high or low your income, you pay one rate):

• Arizona
• Colorado
• Georgia
• Idaho
• Illinois
• Indiana
• Kentucky
• Michigan
• Mississippi
• North Carolina
• Pennsylvania
• Utah

Other states use a combination of marginal tax brackets, tax credits, and other methods that may or may not result in lower-income workers paying less tax. New Hampshire taxes investment income, not wages, while Washington State imposes a capital gains tax solely on amounts exceeding $250,000 annually.

In addition to being taxed at the state level, you may also pay local income tax, depending upon your municipality or county. Some local jurisdictions in these states levy local taxes:

• Alabama
• Colorado
• Delaware
• Indiana
• Iowa
• Kansas
• Kentucky
• Maryland
• Minnesota
• Missouri
• New Jersey
• New York
• Ohio
• Oregon
• Pennsylvania
• West Virginia

All state and local income taxes paid during the year, either through payroll deductions or payments made directly to your state or local government, are included in the federal SALT deduction.

 Which states impose no income tax?

Several states have no income tax on wages, although they levy sales and real estate taxes (among others). As of 2024, these states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

Sales tax instead of income tax deduction

If your state has no income tax or it is low, you may choose to deduct sales taxes you paid during the year instead of deducting state and local income taxes.

You can total the sales tax you paid throughout the year by saving each receipt. A simpler way is to use the IRS sales tax deduction calculator—just enter your ZIP code and answer a few quick questions.

State and local real and personal property taxes

The federal SALT deduction includes all state and local taxes paid for property you own.

• Real property taxes: If you own a home or land, you pay property tax to your local jurisdiction based on its value.
• Personal property taxes: In some states, you pay an annual tax on vehicles or boats you own.

SALT deduction limits

The Tax Cuts and Jobs Act (TCJA)—signed into law by then-President Donald Trump in 2017—placed a $10,000 cap on state and local tax deductions. (Those married and filing separately can each deduct up to $5,000.) Previously uncapped, the limit primarily affects those in high-tax states, where property, income, and sales taxes may easily exceed $10,000. The provision is set to expire at the end of 2025 unless Congress extends or revises it.

Taxes and fees you can’t deduct

You might pay several types of taxes and fees each year that aren’t considered state and local taxes. The IRS says none of these are deductible:

Even if your state and local taxes total less than the $10,000 cap, these taxes and fees can’t be included in your SALT deduction calculation.

The bottom line

If itemizing gives you the lowest taxable income, consider it when filing your federal tax return. Itemizing allows you to deduct the state and local taxes you paid during the year—up to $10,000 for individuals or married couples filing jointly. (If married filing separately, each spouse can take $5,000.)

To claim the state and local tax (SALT) deduction, keep receipts for real estate and personal property taxes you paid, along with records of any other state or local taxes you paid. When filing your taxes, use these records to calculate the total deduction. Don’t include payroll deductions, which are listed on your W-2. If your state doesn’t have an income tax, you can still claim a deduction for sales tax. Either add up the sales tax paid using your saved receipts or use the IRS calculator to estimate the amount based on your income and location.

Staying informed about tax legislation—especially in 2025, when key provisions of the TCJA are set to expire—can help you know which records to keep and how changes might affect your tax return. Your tax software or tax preparer can guide you, and for the latest updates, visit Britannica Money’s tax channel.

References

Originally Appeared Here

The new year is fast approaching, and with it the Internal Revenue Service (IRS) has announced that it will implement new policies that will increase the limits of the amounts individuals can contribute to their pension and retirement plans. This is done as part of the annual cost-of-living adjustments for pension plans and other retirement accounts, as well as a concerted effort to allow older beneficiaries to boost their savings for retirement.

What Are the Increases proposed by the IRS?

The most popular retirement account, the 401(k) plan, will have its contribution limit raised in 2025, which will allow workers to set aside up to $23,500 which is a moderate increase from the $23,000 cap in 2024. It is not the only plan that will increase its contributions, those enrolled in 403(b) plans and the federal government’s Thrift Savings Plan will also see their annual contribution limit rise to $23,500 in 2025, up from $23,000 in 2024.

The IRS said in a statement about the new changes, specifically regarding the new rules for those aged 50 and older “The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan remains $7,500 for 2025. Therefore, participants in most 401(k), 403(b), governmental 457 plans and the federal government’s Thrift Savings Plan who are 50 and older generally can contribute up to $31,000 each year, starting in 2025.”

There is one type of account that will keep the current limit, and that is the IRA accounts, which will still only allow a $7,000 contribution for 2025. As the statement continued to explain “The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2025.”

Tax Deductions and income thresholds

Contributions to retirement accounts are not the only changes the IRS is looking to implement in 2025, it will also increase some of its deductions to adjust them to the cost of living adjustment salaries go through. This, along with a shift in the income tax brackets, will ensure that those who technically earn the same as they did before because of inflation do not continue to climb tax brackets and are not burdened by more taxes than they should reasonable pay.

Having said this, in 2025, the standard deduction will increase to $15,000 for single filers and married individuals filing separately, reflecting a $400 rise from the prior year. Married couples filing jointly will see their deduction grow to $30,000, an $800 increase. For heads of households, the deduction will climb by $600, reaching $22,500.

The adjustment of the tax breaks will also be important for individuals. It will include revisions to the income thresholds for all seven federal tax brackets. It is important for workers to remember that not all income is taxable. Taxable income is obtained after subtracting the greater of the standard or itemized deductions from your adjusted gross income, which is why the adjustment of the standard deductions is so important for taxpayers.

Once the taxable income is calculated it is divided into portions taxed at progressively higher rates, depending on the federal tax bracket you fall into. These brackets are:

• 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly).
• 12% for incomes over $11,925 ($23,850 for married couples filing jointly).
• 22% for incomes over $48,475 ($96,950 for married couples filing jointly).
• 24% for incomes over $103,350 ($206,700 for married couples filing jointly).
• 32% for incomes over $197,300 ($394,600 for married couples filing jointly).
• 35% for incomes over $250,525 ($501,050 for married couples filing jointly).
• 37% for incomes over $626,350 ($751,600 for married couples filing jointly). This bracket will not change in 2025 and continues to be the same as in 2024.

Originally Appeared Here

In summary

Gov. Newsom just bought a $9 million house in Marin County, but his sources of income haven’t been made public recently. He had pledged to release his tax returns.

Welcome to CalMatters, the only nonprofit newsroom devoted solely to covering issues that affect all Californians. Sign up for WhatMatters to receive the latest news and commentary on the most important issues in the Golden State.

Despite pledging to be the first California governor to release his tax returns every year while in office, Gov. Gavin Newsom has yet to make any additional filings public during his second term.

Newsom last disclosed a tax return nearly three years ago, in March 2022, as he was running for re-election. Under a state law, signed by Newsom himself, that requires gubernatorial candidates to release their five most recent income tax returns, the governor shared filings through 2020, when he and wife Jennifer Siebel Newsom earned nearly $1.5 million and paid about $480,000 in taxes.

A spokesperson for Newsom declined to provide CalMatters with any of his tax returns since then. Nathan Click said the governor’s team would organize an opportunity for reporters to review the documents in a controlled setting, as it has in the past, but did not provide a date or respond to any follow-up questions.

Newsom’s finances have come under renewed scrutiny since media outlets in San Francisco reported late Friday that the governor and his wife recently paid around $9 million for a new home in the Marin County town of Kentfield. The Newsoms revealed over the summer that they planned to move back to the Bay Area from the Sacramento suburbs “to ensure continuity in their childrens’ education.”

Izzy Gardon, a spokesperson for the governor, said he did not know whether the Newsoms had paid for the Kentfield house entirely themselves or received financial assistance for the purchase from an outside entity.

As governor, Newsom receives an annual salary of $234,101, but he also continues to earn income from a wine and entertainment empire that he placed in a blind trust before taking office in 2019. In their tax return for that year, disclosed in 2021, the Newsoms revealed that they had not yet sold their previous home in Kentfield — which was initially placed on the market for nearly $6 million — and were renting it out for $20,000 per month.

Newsom began releasing his tax returns on the campaign trail in 2017 as he was running for his first term for governor. It resumed a tradition abandoned by his predecessor, former Gov. Jerry Brown, who resisted disclosing his own returns, and was seen as a dig at then-President Donald Trump, whose refusal to make his tax filings public was an enormous political controversy at the time.

Two years later, Newsom signed a bill — previously vetoed by Brown — to keep presidential candidates off the California primary ballot unless they released their tax returns. The California Supreme Court ultimately struck down the law as unconstitutional, though they did maintain a secondary provision that extends the same requirement to gubernatorial candidates in the state.

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Originally Appeared Here

By David Voreacos and Olga Kharif | Bloomberg

To his followers, Roger Ver is known as Bitcoin Jesus, a charismatic advocate of the cryptocurrency that is once again captivating investors with record-breaking gains. But to the Internal Revenue Service, Ver symbolizes a new target in the digital age: a crypto holder suspected of failing to pay taxes after selling tokens.

US prosecutors charged Ver this year with evading more than $48 million in taxes for selling $240 million in tokens. It’s the most prominent case dealing solely with tax fraud and digital-asset sales, and marks a break from the tradition of prosecutors tacking tax charges onto crypto cases for crimes like money laundering, ransomware attacks and investor scams.

Ver, 45, is awaiting a Spanish judge’s decision on whether he must be extradited to America after his April arrest in Barcelona while attending a crypto conference. The US expatriate spent a month in jail before getting out on bail and moving to Mallorca, where he’s received a steady stream of visitors. An outspoken critic of the US government, he said he’s being persecuted by prosecutors.

“They don’t like me, and they don’t like my political views, and they just came at me every which way,” Ver told Bloomberg News in an exclusive interview in late October.

RELATED: 2 California men charged in $230 million cryptocurrency theft following FBI raid of Miami mansion

Ver said the Justice Department has ignored evidence that helps his defense and refutes a central premise by prosecutors – that he intended to cheat the IRS. Rather, he said, he relied on professionals who advised him when IRS policy on taxing crypto sales was unsettled.

“I instructed all my tax attorneys and preparers, ‘We need to do everything perfectly because I don’t want any problem with the IRS at all,”’ Ver said. “That was their instructions the whole time.”

A Justice Department representative declined to comment.

The seeds of Ver’s legal peril lay in his success as an early crypto investor — long before the latest Bitcoin rally fueled by Donald Trump’s US presidential win. They center on his representations to the IRS and the agency’s reconstruction of his holdings.

Ver grew up in Silicon Valley, founding a computer company called MemoryDealers at the precocious age of 19. He also engaged in tax protests and ran for California’s legislature at 21 as a libertarian.

In 2001, he pleaded guilty to dealing explosives without a license. (Ver says he simply sold firecrackers on eBay.) He served 10 months in prison, which hardened his attitude toward the US government. He left America in 2006, moving to Japan. He focused on building MemoryDealers and another firm, Agilestar, which sold optical transceivers.

Spreading the Gospel

When crypto began, he embraced its promise for transferring wealth without government interference. He started buying Bitcoin in 2011 for less than $1, touting it at barbecues, parties, and everywhere else. Intense and fast talking, he spread the vision of using crypto to buy a sandwich or even a car. When Bitcoin hit it big, Ver touted its potential from conference stages.

He co-founded Blockchain.com, a crypto company once valued at $14 billion, and was an early investor in payment processor BitPay and digital-asset firm Ripple. When the Bitcoin network underwent a software upgrade he opposed in 2017, Ver broke with the community, switching to a split-off called Bitcoin Cash. He said his current holdings include Bitcoin, Bitcoin Cash, Ether and Zeno.

Despite his notoriety, Ver decided in 2014 to renounce his US citizenship, later becoming a citizen of St. Kitts and Nevis. US citizens who expatriate and are worth more than $2 million must report their worldwide assets to the IRS, and pay an exit tax based on their asset sales.

As he planned to expatriate, prosecutors allege, Ver hid the number and value of Bitcoin he owned and controlled personally and through MemoryDealers and Agilestar, his California-based companies.

The IRS used blockchain analysis to determine that by early 2014, Ver and his companies owned about 131,000 Bitcoin trading between $782 and $960, according to the indictment — more than he reported in tax filings. He’s accused of tax evasion, wire fraud, and filing a false tax return.

Ver worked with a law firm and appraisers on the exit tax, but gave them false or misleading information about his Bitcoin holdings, and an exit tax return filed in 2016 failed to report the Bitcoin he owned personally and underreported the value of his companies, prosecutors charge.

The indictment also alleges Ver “fraudulently misrepresented and concealed” from the IRS the crypto that his companies sold in 2017 for about $240 million.

Ver disputes this characterization, but declined to discuss the indictment further or elaborate on his crypto holdings with Bloomberg.

A website, freerogernow.org, is linked to Ver’s personal website and encourages supporters to sign an open letter calling on the US government to end his “unjust prosecution.” It adds some details about his investigation, including claims that IRS agents interrogated his tax lawyer in 2018 without a warrant and that litigation ensued about communications with his lawyers.

In 2022, the US Supreme Court took up a case that didn’t name the parties but matched Ver’s circumstances. The court dropped that case in 2023 without issuing a ruling.

If he’s extradited, Ver’s case would be the first to go to trial on crypto-only tax charges. In February, a Texas man, Frank Ahlgren, was accused of underreporting capital gains from selling $3.7 million in Bitcoin. Ahlgren pleaded guilty in September.

Ver, who has more than 700,000 followers on X, spent years under IRS investigation as he traveled the world. In 2021, he posted a satirical video titled “Taxation is Theft.”

Ver was indicted Feb. 15 under court seal but didn’t learn about it until weeks later, when he was at the Privacy Guardians conference in Barcelona. His book, Hijacking Bitcoin: The Hidden History of BTC, had just gone on sale. A police officer approached him in the lobby of the W Hotel, asked him to confirm his identity, and said he had an Interpol arrest warrant for him.

“The bottom kind of fell out of my stomach and I was like, ‘Oh, my God, the US is going to do this to me again,”’ Ver said.

Back to Jail

With his arrest, Ver returned to prison, this time to a two-man cell in Spain. Some inmates incorrectly assumed he was American spy or undercover cop, he said.

“I didn’t tell anybody in there who I was because I didn’t want to get extorted or have any sort of problems with anybody,” Ver said.

Spain has been a close ally of the US in extradition cases. This year, Spain sent Douglas Edelman, a former defense contractor, to face US charges he evaded taxes on more than $350 million in income. He’s pleaded not guilty and denies the charges.

Ver said he’s spending his days in Mallorca talking to his lawyers on Zoom, practicing Brazilian jiujitsu and entertaining friends visiting from overseas. He’s attended Bitcoin meetups, where he said he was well received.

Ver appeared in an HBO documentary about the origins of Bitcoin. A sparring partner from jiujitsu said he’s seen him in the show.

“I said, ‘Please, if you don’t mind, don’t mention that to anybody else.’ He said, ‘Sure, no problem.’ But he had kind of a sly grin when he said that to me.”

–With assistance from Ava Benny-Morrison and Jorge Zuloaga.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

Originally Published: November 14, 2024 at 7:17 AM PST

Originally Appeared Here

In his famous years, Willie Nelson had a slew of unique experiences, including releasing the first and only major-label album within an agreement with the IRS. The IRS Tapes: Who’ll Buy My Memories? came from a run-in Nelson had with the IRS in 1990, where they seized all of his assets.

In 1990, Willie Nelson struggled to pay $16.7 million in back taxes. In the 1980s, Nelson made some investments that were later declared illegal by the federal government, and he owed significant debt on top of interest and penalties. According to a report from History, Nelson’s lawyers agreed to a cash payment of $6 million to settle the debt. However, despite being one of the most successful outlaw country stars, Nelson simply didn’t have the money.

On November 9, the IRS seized all of his assets, froze his bank accounts, and forbade access to his properties. This included his ranch in Dripping Springs, Texas; Pedernales Country Club and Recording Studio; at least 20 other properties, as well as memorabilia, recordings, and instruments. The one thing they didn’t get was Trigger, Nelson’s guitar. His daughter Lana had it shipped to him in Hawaii before the feds raided his properties.

“As long as I got my guitar,” Nelson said at the time, “I’ll be fine.”

[RELATED: “I’ll Be Back in a Minute”: Willie Nelson on His Death, Reincarnation, and What He Thinks He’ll Come Back As]

Willie Nelson vs. The IRS and the Album that Helped Save His Career

According to Lana, Willie Nelson didn’t have $6 million to pay off the negotiated debt. He didn’t have $1 million, or even $30,000, as she told Texas Monthly at the time. However, Nelson and his lawyers further negotiated with the IRS, which led to the compilation album Who’ll Buy My Memories?

Additionally, as it turns out, a lot of Willie Nelson fans will buy his memories. The IRS planned to auction off Nelson’s belongings to assist in paying his debts, but allowed much of the property to be purchased by the Willie Nelson and Friends Showcase for around $7,000.

When Nelson’s 44-acre San Marcos, Texas ranch went up for auction, a farmer’s lobbying group purchased it with the express purpose of selling it back to Nelson. He had helped this group through Farm Aid, and they planned to return the favor.

Additionally, his Pedernales Country Club/studio was purchased by former University of Texas football coach Darrell Royal. He planned to keep the property to eventually return it to Nelson as well. The IRS caught wind of this and refunded his money, but when the property went up for auction again, Nelson’s nephew Freddy Fletcher bought it. Willie Nelson’s fans, friends, and family were rallying together to help the country legend keep his belongings.

Eventually, a plan was enacted between the IRS and Willie Nelson. He would release a compilation album, and a portion of the revenue would go toward paying off his debts, among other necessary payments. The album retailed at $19.95, and could be ordered by dialing (800) IRS-TAPE. The revenue was split among the company promoting the album, the IRS, Willie Nelson, Sony Records, other album-related expenses, and the tax generated by the sale.

The IRS Tapes Brought in Significant Funds, but Not Enough to Pay the Debt On Its Own

The album only generated $3.6 million for Nelson’s debt, but he also sued Price Waterhouse—the company that made the shady investments with Nelson in the first place—and when he settled the lawsuit, he was able to pay off the rest of his debt in the following years. By 1993, he was debt-free.

“Mentally, it was a breeze,” Nelson told Rolling Stone in 1995. “They didn’t bother me, they didn’t come out and confiscate anything other than that first day, and they didn’t show up at every gig and demand money. I appreciated that. And we teamed up and put out a record.”

Featured Image by Paul Natkin/WireImage

Originally Appeared Here

Landry’s income tax rate plan advances to House committee

Published 8:49 am Saturday, November 9, 2024

Louisiana Governor Jeff Landry, center, greets Rep. Polly Thomas, R-Metairie, left, and Rep. Michael Johnson, R-Pineville, right, as he enters the Louisiana House of Representatives on the opening day of a legislative special session, Wednesday, November 6, 2024, at the Louisiana State Capitol in Baton Rouge, La. (Hilary Scheinuk / The Advocate, Pool)

By Quinn Marceaux, Gracelyn Farrar and Ella Ray | LSU Manship School News Service

BATON ROUGE — A House tax committee voted Thursday to advance Gov. Jeff Landry’s proposal for a flat 3% personal income tax rate.

If approved by the full House and Senate, the plan would eliminate the current income tax brackets and move the state closer to Landry’s ultimate goal of eliminating the income tax.

Thursday’s vote by the House Ways and Means Committee marked the first step in passing what is seen as Landry’s flagship portion of the tax plan introduced during his Wednesday speech at a special session of the Legislature.

“This is an income tax cut for everyone in Louisiana,” said Rep. Julie Emerson, R-Carencro, who chairs the committee. “The overall goal is to stimulate the economy and broaden our tax base. We want to show the people we are lowering their personal income tax rates, just like other states where they are thriving.”

The committee passed the bill 15-3 vote, with Democratic Reps. Marcus Bryant of District 96, Mandie Landry of District 91 and Matthew Willard of District 97 in opposition.

“I voted against the flat tax because it is a regressive tax,” Rep. Landry said. “It rewards the rich and harms the poor.”

The committee also voted Thursday on another portion of Landry’s tax plan: eliminating the corporate franchise tax. The measure would remove the tax levied by the state on major corporations wanting to do business in Louisiana.

It passed 17-1, with Willard as the only dissenting member.

These two bills will be considered by other House committees before they reach the House floor.

Jan Moller, the executive director of Invest in Louisiana, was disappointed by the committee’s decisions. “An almost $2 billion tax cut was passed today,” he said, referring to the costs of both bills combined.

He said the benefits of the tax cuts will flow disproportionately to the wealthy and people living out of state. His fear is that the money given in the form of tax cuts to corporations will go to shareholders elsewhere instead of staying in Louisiana to benefit education and health care.

“When you cut taxes to this magnitude,” Moller said, “you run the risk of having to make deep cuts to services citizens depend upon.”

The tax changes would cost the state $7.4 billion over the next five years. Landry aims to offset these reductions by broadening the sales tax base to tax more services such as streaming services and luxury services such as lawn care as well as reducing special-interest tax breaks.

He says these changes will encourage businesses and families to stay in the state.

“If we do not act, studies show that one in four children will leave our state for better opportunities,” Landry told lawmakers Wednesday. “The time for piecemealing, stalling and kicking the can down the road is over.”

During his speech, Landry introduced the other portions of his tax plan, which include eliminating the sales tax on prescription drugs and more than doubling the income tax deduction for seniors.

He also proposed a permanent pay raise for all teachers by tapping into a frozen $2 billion education fund.

The governor framed these reductions as essential investments in Louisiana’s future, suggesting that this relief for seniors and teachers would allow the state to retain talent and improve quality of life.

“Cutting our personal income tax by 30% will trumpet a new day in Louisiana,” he said. “We will effectively eliminate the income tax for the working poor, putting us on a path for eliminating the income tax once and for all,” Landry said.

Landry said that if the Legislature does not accept his tax plan in full, then residents will be “stranded halfway across the river.” He said that every aspect of his plan must coincide with other parts of the proposal to achieve the kind of change that Louisianians need.

The state is heading for a fiscal cliff next year, thanks to the expiration of .45% of the state sales tax and a 2% business utilities tax in June 2025.

Moller believes that the easiest way to fix the fiscal cliff is to renew those taxes or replace them. He is frustrated that the Legislature has called a special session right now to address the impending fiscal cliff. He said lawmakers are working on a tighter deadline than is necessary.

“A fiscal cliff is not a natural disaster,” Moller said. “The Legislature created it. They can fix it.”

State legislators are privately expressing concern that they will not have enough time or information to make the changes that Landry wants without causing more problems than they solve.

Landry and Revenue Secretary Richard Nelson have been holding private meetings with various lawmakers and making public presentations to try to sell the plan.

l

Anna Puleo and Avery Sams contributed additional reporting.

Originally Appeared Here