2021 Year in Review: Key Takeaways for U.S. Taxpayers Heading Into 2022

As we head into 2022, there are lots of lessons that U.S. taxpayers can (and should) carry forward from 2021. In this article, Washington D.C. tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, recaps some of the key topics we covered on our blog throughout the year.

Remedying Late FBAR Filings

The IRS provided some practical tips for FBAR compliance in 2021. However, as many U.S. taxpayers are unaware of the FBAR filing requirements entirely, providing these types of tips only goes so far. We regularly publish information on remedying FBAR compliance violations, and 2021 was no exception:

• 2021 Tax Reporting Requirements for Foreign Financial Accounts and Other Offshore Assets
• What Should You Do if You Need to File a Late FBAR?
• Can You Avoid Late FBAR Penalties Based on “Reasonable Cause”?

Remedying Late FATCA Filings

In addition to meeting the FBAR filing requirements, many U.S. taxpayers who own offshore assets must comply with the Foreign Account Tax Compliance Act (FATCA). We also covered a variety of topics pertaining to FATCA compliance in 2021, including:

• To File or Not to File: What is a Reportable Foreign Financial Asset Under FATCA?
• What Form(s) Do You Need to File to Comply with FATCA?

Cryptocurrency Tax Liability and Reporting

Cryptocurrency tax compliance is likely to remain a hot topic for the next several years. The IRS is prioritizing enforcement of cryptocurrency investors’ reporting and payment obligations, and it will soon have some powerful new tools at its disposal. For more information, investors can read:

• IRS: Certain Cryptocurrency Transactions Do Not Qualify as Like-Kind Exchanges
• Infrastructure Bill Heads to President Biden for Signature—Cryptocurrency Reporting Requirements Included
• What You Need to Know if the IRS Scrutinizes Your Cryptocurrency History

Pandemic-Related Tax Matters

The IRS and other agencies have been cracking down hard on individuals and companies suspected of defrauding COVID-19 pandemic relief programs. With this in mind, it is important for those that have utilized these programs to make sure they will be able to prove compliance if necessary. Learn more:

• IRS Establishes Safe Harbor for PPP Non-Compliance
• IRS Releases FAQs on Coronavirus State and Local Fiscal Recovery Funds (SLFR Funds)

Tax Enforcement Priorities for 2022

In May, we reported that the U.S. government is seeking to raise an additional $700 billion in revenue through IRS audits over the next several years. In order to meet its mandate, the IRS will be targeting a number of enforcement priorities. We covered several of these priorities specifically in 2021, and our review of IRS CI’s FY 2021 Annual Report sheds light on some key concerns for taxpayers in 2022 as well:

• IRS and DOJ Target Abuse of Conservation Easements
• Charitable Donations, Tax Deductions and IRS Audits: What Taxpayers Need to Know
• IRS CI’s FY 2021 Annual Report Spotlights Enforcement Priorities

Schedule a Confidential Consultation with Washington D.C. Tax Lawyer Kevin E. Thorn

Washington D.C. tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, represents individuals and businesses in all federal tax matters. If you need advice or representation, you can call 202-349-4033, email ket@thornlawgroup.com or contact us online to schedule a confidential consultation.