#taxcrimes

[thedailyshows]

Todd and Julie Chrisley report to federal prisons

The Daily Shows USA Todd and Julie Chrisley report to federal prison tax fraud are now in the custody of federal prison officials, according to their counsellor Alex Little.

The couple, sentenced to prison last month in November for fraud and tax crimes, reported to their trusted prisons in Florida and Kentucky before Tuesday’s deadline, which was noon local time, Little related to the Daily Shows.

See More : thedailyshows.com

[sublimeobservationarcade]

PwC Tax Crime: A Question Of Loyalty

The auditing consultancy firm PwC has betrayed the confidential trust bestowed upon it by the Australian Federal Government. PwC tax partner Peter John Collins has been banned for 2 years by the Tax Board and referred to the Australian Federal Police for investigation. Over 50 PwC senior employees and partners received emails from Peter Collins disclosing confidential information relating to proposed changes to corporate taxing. The outcome of this may well have cost the national tax coffers tens of billions of dollars over the years since this white collar crime and accountancy version of insider trading occurred in 2014/15. PwC tax crime: A question of loyalty.

PwC Tax Agent Misconduct

The Senate enquiry into this matter, which revealed this serious transgression by PwC, poses some pertinent questions. It is a question of where do the loyalties of these accountancy professionals lie? The cross fertilisation of corporate tax accountants inside Treasury, Department of Finance, and ATO makes this observer wonder at the influence of outsourcing by governments over many years. Does the national interest rate highly in the hearts and minds of these accountancy boffins or do they predominantly honour their profession and corporate masters?

Australian Public Service Compromised By PwC?

The absence of public service independence has been revealed by the Royal Commission into the Robodebt Scheme. Senior bureaucrats have been shown to value their highly paid jobs over moral and legality concerns in the many years of Robodebt operation. PwC was involved in preparing a report on Robodebt. Indeed, PwC has earned billions of dollars doing consultancy work for the federal government in recent years. The Abbott, Turnbull, Morrison governments were intimately involved in increasing the outsourcing of government work to consultancy firms and reducing the size of the public service.

RDNE Stock project at Pexels PwC tax crime: A question of loyalty for those professionals involved. The conservative attitude to government and taxing promulgated by Liberal and National politicians is publicly reductionist. The actual facts show increases in the size of government during their years in power, however. I mention this because one wonders whether these corporate tax accountants clearly see increases to taxation in the national interest or whether they consider their professional interests paramount. It raises societal questions about the power of corporations over countries. Who is their first port of call, Australia or PwC? Accountants are everywhere and they are directly involved in the way our economies and worlds are structured and operate. Corporations continue to grow as market concentration increases globally. There are 4 big multinational auditing firms, of which PwC is one of them. The decades of Neoliberalism has seen the exponential rise of monetary policy as the key element of governing the economy. Accountants and economists have become ever more important to the running of our Western nations. Governments have been giving up control to private corporations via outsourcing their duties. The PwC misconduct and potential crime is a natural outcome of this dereliction of duty for short term cost savings. It is likely that the existing public service is compromised via the influence of corporate consultancy firms. It is a mixed stew of expediency, corporate greed, self-preservation, and divided loyalties.

Professor Alan Fells has been saying for years that Auditing firms should not be tendering for consultancy and financial services work as well. That there needs to be a clear level of separation protecting confidential information. These corporate giants in the accountancy sector must be reduced and/or broken up. Accountants have great potential for criminal behaviour because they are where the money is. The stereotype of the boring accountant is outdated and inaccurate in the 21C. Who sets up all these evil trusts and tax avoidance schemes that allow very rich people to dodge their tax responsibilities? Accountants. The PwC tax crime is not a case of a few bad apples it is a systematic failing of professional standards, it is corporate malfeasance, and the dimming of loyalties to the national interests of Australia by Australians.Robert Sudha Hamilton

Nataliya Vaitkevich at Pexels “Police are now investigating the leak of confidential tax information by a former PwC partner at the request of the Australian government. The Australian Federal Police has launched an investigation into former PwC employee Peter-John Collins and his role in the Treasury tax leaks scandal today, May 24. An AFP spokesperson told the Australian Broadcasting Corporation that the police have “received a report of crime relating to the alleged misuse of confidential government information”. “An investigation has commenced and no further comment will be made at this time,” the spokesperson added. PwC Australia received confidential government tax plans after Collins, the firm’s former head of international tax, attended high-level meetings as part of his role in an advisory group to the Australian Treasury. The Tax Practitioners Board has imposed a two-year ban on Collins as a penalty. Collins left PwC Australia in October 2022. Steven Kennedy, secretary to the Treasury, said Collins had “improperly used confidential Commonwealth information” in an official statement earlier today. “The emails that the Tax Practitioners Board tabled in Parliament on May 2 2023 highlighted the significant extent of the unauthorised disclosure of confidential Commonwealth information and the wide range of individuals within PwC who were directly and indirectly privy to the confidential information,” Kennedy said. “In light of these recent revelations and the seriousness of this misconduct, the Treasury has referred the matter to the Australian Federal Police to consider commencement of a criminal investigation,” he added. PwC Australia CEO Tom Seymour stepped down on May 9 over the scandal. An independent inquiry has been launched and Seymour is set to retire in September, when the results of the investigation will be published. Last week, Kristin Stubbins, acting CEO, said: “We are committed to learning from our mistakes and ensuring that we embrace the high standards of governance, culture and accountability that our people, clients and external stakeholders rightly expect.” The ‘big four’ firm has flown in global executives to take oversight of the crisis, while former Telstra CEO Ziggy Switkowski conducts an independent review of the leak and the company. A PwC Australia spokesperson said the firm “will continue to co-operate fully with any investigations into this matter”, reported Reuters.” - https://www.internationaltaxreview.com/article/2bpem9ws6gqq88mlkga9s/former-pwc-australia-partner-faces-criminal-investigation-over-tax-leaks ©House Therapy Read the full article

[mr-michael-kyle]

The feds could be coming for President Biden’s son. The Washington Post reported earlier this month that federal agents believe they have sufficient proof to charge Hunter Biden with tax and gun crimes.

Because of his father’s position, any move against him might have political consequences. The president, in the meantime, has offered his son some public support. “I have great confidence in my son,” the elder Biden said this week in a CNN interview. “I love him. He’s on a straight and narrow, and he has been for a couple years now.” The statement received pushback from conservatives: “That was a clear push for mercy — from the ultimate boss of the Justice Department that is weighing charges against Hunter,” the New York Post said in an editorial. What are the allegations facing Hunter Biden, and what may the fallout be? This is everything you should know.

What did Hunter allegedly do wrong?

The president’s son, now 52, has had well-publicized troubles with drug habit, which play a part in the potential charges. The gun charges, for instance, stem from a period when he was, “by his own account … smoking crack cocaine,” the Post reports. That was 2018, when Hunter Biden bought a handgun — and allegedly answered “no” to a question about whether or not he had unlawfully used drugs.

The younger Biden’s taxes have additionally been under scrutiny for years, The New York Times reported in March. That investigation started during the Obama Administration, however “widened in 2018 to include possible criminal violations of tax laws, as well as foreign lobbying and money laundering rules.” The paper reported that Hunter paid off his tax liability — which he informed friends amounted to greater than $1 million — however that may not save him from legal trouble: Prosecutors argue “that the crime happens when the return is falsely filed or not filed at all.”

Are there other problems?

Hunter Biden has arguably been drifting towards trouble for much of his adulthood — “the guy who even into his 40s keeps needing dad to send the search-and-rescue party,” Matt Yglesias wrote for Vox in 2020. He has made a living as a lawyer and a lobbyist, and more recently as an artist, however it’s not clear he could’ve done much work through the years without his dad’s name and connections. Along with his drug issues, he additionally attracted attention when in 2014 he joined the board of Burisma, a controversial Ukrainian oil and gas company. “Hunter had no apparent {qualifications} for the job except that his father was the vice president and involved in the Obama administration’s Ukraine policy.” When President Donald Trump was impeached in 2019, it was because he’d pressed Ukraine’s president for dirt on Hunter and Joe Biden — and withheld U.S. military aid to give him leverage.

Hunter additionally made a cameo appearance at the end of the 2020 presidential campaign, when a Delaware computer shop owner emerged with a report that Joe Biden’s son had abandoned his laptop computer at the shop which Slate’s Mary Harris recently described as containing “a whole lot of selfies, some homemade pornography, and email messages hinting at cozy relationships between him and businesspeople from China and Ukraine.” The circumstances appeared improbable enough that Twitter and Facebook put the kibosh on the story — and Republicans have used that incident to recommend the media and “Big Tech”  helped elect Joe Biden — however it now appears more likely to be legit. And it could additionally play a role in the federal investigation.

What are Republicans saying?

They’re planning a Congressional investigation of Hunter, should they take over one or both houses of Congress in this fall’s midterm elections. And it is clear they plan to make use of that investigation not simply to take down Hunter Biden, but in addition his father. “I think the American people are going to be shocked with what they find out the Biden family’s been doing to profit off Joe Biden’s name over the past decade,” Rep. James Comer (R-Ky.) recently told Fox Business Network.

For what it is worth, more than half of Democrats polled in August by Fox News stated it’s “somewhat important” for Hunter Biden’s business dealings to be investigated.

What is going on to happen next?

It isn’t totally clear. “Prosecutions for false statements on gun-purchase forms are relatively rare, but they do happen,” the Post reports. Tax prosecutions are more common, in fact. However even if Hunter avoids charges, the promised Republican investigations mean this story in all probability is not going to go away for the next few years.

Charges against Hunter Biden may come with an odd upside for Democrats. Prosecuting the president’s son “would demonstrate the integrity of the Justice Department, which its previous boss, President Donald Trump, politicized and continues to attack,” Politico columnist Jack Shafer writes. That could be good for the country — however small consolation to the president and his son.

Source: The possible charges against Hunter Biden, explained

[ir-legal]

Changes to employer-assisted temporary work visas: What does this mean for employers?

The Government is making a number of changes that will affect employers who want to recruit foreign workers. The changes aim to improve the temporary work visa system by ensuring that foreign workers are only recruited for genuine shortages, while also providing incentives for employers to employ and train more New Zealanders.

Six temporary work visa categories are going to be replaced with only one type of employer assisted temporary work visa. The new visa application process would require:

·      An employer check, where employers would be accredited to enable them to hire foreign workers;

·      A job check, where the job is checked to ensure that no New Zealander is able to fill the job being recruited for, subject to skill, sectoral and regional differentiation; and

·      A worker check, where checks will be made to ensure the foreign worker is of good character and health.

One of the most notable changes of the new framework is the legal requirement for employers to be accredited to be able to hire foreign workers. Becoming accredited means that employers must prove their “trustworthiness” across several areas. There will be different types of accreditation, but all employers will have to show evidence of:

·      compliance with employment laws;

·      have good human resource processes and policies;

·      financial stability;

·      commitment to increasing worker benefits and pay; and

·      commitment to training and hiring local workers.

Immigration New Zealand says changes will be implemented in stages to help manage a smooth transition over to the new visa application process and also to ensure that all employers are not required to be accredited on the same day.

Now is the time to act. Employers that want to hire foreign workers in the next 24 months must begin the process now, to avoid the inevitable visa-application log jam.

We are specialists in this field and can review your workforce composition, policies and processes as part of our business health check audit. We can explain to you how the new framework may impact your business. We can also provide support with designing, implementing and monitoring your systems and processes to ensure compliance with your obligations as employers. Likewise, we can assist with the preparation of applications for Employer Accreditation.

Ismail Rasheed, Lawyer specialises in Immigration and Tax Law. Visit www.irlegal.lawyer | Phone (04) 566 1155 | (09) 299 1155 | (03) 377 1155 | WhatsApp 027 566 1155

[lbstax]

The biggest tax evasion case against an individual in U.S. history has been unspooling in a Texas court around the tortuous question of whether 80-year-old Robert Brockman is faking dementia. This one may take the IRS years to figure out! https://www.bloomberg.com/news/articles/2021-12-16/billionaire-brockman-may-fight-irs-for-years-even-with-dementia #Brockman #IRS #Dementia #Fines #CriminalCase #TaxEvasion #DeadOrAlive #TaxCrime #Lawsuit #Lein #Accountant #CPA #Accounting #Billionaire #LBSTaxChandler #NewFreedomTaxRelief

The biggest tax evasion case against an individual in U.S. history has been unspooling in a Texas court around the tortuous question of whether 80-year-old Robert Brockman is faking dementia. This one may take the IRS years to figure out! https://www.bloomberg.com/news/articles/2021-12-16/billionaire-brockman-may-fight-irs-for-years-even-with-dementia #Brockman #IRS #Dementia #Fines #CriminalCase #TaxEvasion #DeadOrAlive #TaxCrime #Lawsuit #Lein #Accountant #CPA #Accounting #Billionaire #LBSTaxChandler #NewFreedomTaxRelief

[taxaccountanttaxattorney-blog]

NYC’s Best Tax Attorney & Tax Accountant

We solve Tax Problems including Tax Crimes, Tax Evasion, Failure to File a Tax Return and Criminal Non-Filing, Filing False Tax Returns, Installment Agreements, Partial Payment Agreements, Audits, Sales Tax Controversies, Wage Garnishments, Bank Levies, Seizure of Property, Innocent Spouse Relief, Trust Fund Recovery Penalty, Payroll Taxes, Statute of Limitations, Offer in Compromise ("OIC"), Administrative Appeals, Collection Due Process Hearings ("CDP") and most other tax matters.

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[thedailyshows]

David Crosby passes away at 81

US Los Angeles, CA  Legend David Crosby passes away at 81. David Crosby is an accomplished singer and songwriter who has sold over 50 million records. Crosby was born in Cleveland, Ohio, on December 12, 1946. He began his music career at 15 when he joined the Cleveland rock band The Byrds.

Read More : thedailyshows.com

[mr-michael-kyle]

After a four-year probe, federal agents investigating President Biden’s son Hunter believe they’ve gathered sufficient evidence to charge him with tax crimes and making a false statement related to a gun purchase, people familiar with the case told The Washington Post.

U.S. Lawyer for the District of Delaware David Weiss, a Trump appointee, will now need to determine whether or not or to charge Hunter Biden, the people stated. The investigation started with agents looking into Biden’s finances in relation to his consulting work overseas, and over time started focusing on whether or not he reported all of his earnings and lied about his drug use on gun purchase paperwork in 2018, people familiar with the matter informed the Post.

In a statement to the Post, Hunter Biden’s lawyer, Chris Clark, stated it’s “a federal felony for a federal agent to leak information about a grand jury investigation such as this one. Any agent you cite as a source in your article apparently has committed such a felony. We expect the Department of Justice will diligently investigate and prosecute such bad actors.” Clark additionally stated Biden’s legal team believes “the prosecutors in this case are diligently and thoroughly weighing not just evidence provided by agents, but also all the other witnesses in this case, including witnesses for the defense.”

Former President Donald Trump and his Republican allies have long questioned Hunter Biden’s business ventures, notably those overseas, and Trump’s first impeachment was tied to his July 2019 phone call to Ukrainian President Volodymyr Zelensky, during which he pressured him to investigate both Joe and Hunter Biden.

Source: Report: Federal agents claim they have evidence to charge Hunter Biden with tax crimes

[ir-legal]

Capital Gains Tax Ruled Out

There were good reasons for ruling out Capital Gains Tax. Let’s have a look at some arguments for and against.

Whenever we look at improving our tax system it is predictable that capital gains tax will be raised as an option. It has been examined in 1967, 1978, 1982, 1987, 1988, 1989, 2001, and 2009, 2014 and by the recent Tax Working Group.

One reason we keep returning to capital gains tax is that the exemption for capital gains is the one, large, glaring exception to New Zealand’s “broad base” approach to taxation and, of course, expanding the tax base is necessary unless we are happy with increased indebtedness to foreign nations.

A big portion of the Tax Working Group’s final report is focused on the question of whether New Zealand should adopt a capital gains tax.

Some argue a capital gains tax on investment properties would be fairer and ease inter-generational tensions. A question often raised is whether it is fair to tax money earned from a bank deposit, but not from capital gains on an investment property.

At present, interest from term deposits is taxed, but the capital gain on the sale of an investment property is not. But should this differing treatment exist? In a policy report, ‘Benefits and Drawbacks of a Capital Gains Tax’ prepared in February 2014 for the then Minister of Revenue Todd McClay, Inland Revenue noted:

“There is no obvious reason why a person who derives $100,000 in interest income should be taxed differently to a person who derives $100,000 in capital gains.”

The argument that a “buck is a buck” and everyone should therefore bear the same tax burden on every dollar earned is attractive.

So, why are we reluctant to tax capital gains from investment property? I do not think it is about fairness.

Many commentators have come out against recommendations to impose a capital gains tax because they are all concerned it will have a crippling effect on businesses and farmers.

While capital gains taxes raise revenues for government they do so with considerable economic harm.

Capital gains taxes reduce the return that entrepreneurs and investors receive from the sale of their investments. This diminishes the reward for entrepreneurial risk-taking and reduces the number of entrepreneurs and the investors that support them. The result is lower levels of economic growth and job creation.

One of the most significant economic effects is the incentive it creates for owners of capital to retain their current investments even if more profitable and productive opportunities are available.

Economists refer to this result as the “lock-in” effect. Capital that is locked into sub-optimal investments and not reallocated to more profitable opportunities hinders economic output.

Also, we should not ignore the fact that one of the principles of good tax policy is that there should be no double taxation of income that is saved and invested. Such a policy promotes current consumption at the expense of future consumption, which is simply an econo-geek way of saying that it penalises capital formation.

Every economic theory agrees that capital formation is key to long-run growth and higher living standards. Even Marxist and socialist theories are based on this notion (they want government to be in charge of investing, so they want to do the right thing but in a very wrong way). Many economists believe that the economically optimal tax on capital gains is zero.

President Obama’s first chief economic adviser, Larry Summers, wrote in the American Economic Review in 1981 that the elimination of capital income taxation “would have very substantial economic effects” and “might raise steady-state output by as much as 18 percent, and consumption by 16 percent.”

Whatever else might be said either for or against it, the introduction of capital gains tax would entail significant change for lawyers, accountants, valuers, businesspeople and investors generally; and the transition period – from the government’s announcement of the tax until several years after its introduction – would be likely to be particularly challenging.

Introduction of capital gains tax in New Zealand would add huge complexity to what is currently one of the world’s simplest tax systems and would result in a massive industry – as happens elsewhere in the world.

Ismail Rasheed is specialist tax lawyer with 19 years’ experience.

IR Legal, Level 2, 318 Lambton Quay, Wellington | Level 31, 48 Shortland Street, Auckland | P: 04 566 1155  | 09 299 1155 | E: office@irlegal.lawyer

[ir-legal]

Is Immigration NZ following International Law binding on New Zealand?

New Zealand’s current immigration stance on partnership-based visa appears to be at odds with International Law.

New Zealand immigration laws provide a framework for Immigration New Zealand to manage immigration in a way that balances our national interests with our international obligations. That is the scheme and purpose behind the Immigration Act 2009.

Under international human rights law, the family is recognized as the fundamental group unit of society and entitled to protection and assistance by Article 16(3) of the 1948 Universal Declaration of Human Rights (UDHR); by Article 23(1) of the 1966 International Covenant on Civil and Political Rights (ICCPR) an by various Articles of the 1990 International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families (CMW) amongst other international conventions and treaties.

New Zealand has made a commitment to uphold the UDHR and ratified the ICCPR on 28 December 1978 without any reservation on Article 23(2).

The United Nations Human Rights Committee (UNHRC), established to monitor States’ implementation of ICCPR has clarified that: “[t]he right to found a family in Article 16(1) of UDHR implies, in principle, the possibility to … live together”.

Therefore, Immigration New Zealand’s current stance of not allowing overseas people (lawfully wedded wives and husbands, de facto partners, and young children) to visit and live with their families in New Zealand is arguably in breach of International human rights law that is binding on New Zealand.  

The involuntary separation of families by State intervention, which is devastating to the individuals involved and frequently destructive in its long-term impact on cultural groups and entire societies, is a widespread problem that deserves increased attention as an issue of international human rights law.

For anyone, it would seem cruel and inhuman to decline visitor visas for partners and young children of New Zealand citizens, residence class visa holders and work visa holders who are tirelessly contributing to New Zealand economy and the well-being of other New Zealanders. Some of them are New Zealand born citizens and they need their families to live with them in New Zealand. Immigration New Zealand cannot dictate who New Zealanders should marry – that is a breach of fundamental international human rights law binding on New Zealand. 

What message is New Zealand now sending out to the rest of the world while the government proclaims to be advocating universal human rights law both at home and abroad? 

IR Legal specialises in Immigration Law and Tax Law. Visit www.irlegal.lawyer | Phone (04) 566 1155 | (09) 299 1155 | (03) 377 1155 | WhatsApp 027 566 1155

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[ir-legal]

Family Separation is a Violation of International Law

New Zealand immigration laws provide a framework for us to manage immigration in a way that balances our national interests with our international obligations, protecting both New Zealanders and migrants. In particular, the Immigration Act 2009 provides a legal basis for New Zealand to meet its international responsibilities under the Refugee Convention, the Convention Against Torture, and the International Covenant on Civil and Political Rights.

Devastating to the individuals involved and frequently destructive in its long-term impact on cultural groups and entire societies, the involuntary separation of families is a widespread problem that deserves increased attention as an issue of international human rights.

Talking about involuntary separation of families in New Zealand, in the past a general visitor visa could be granted to a partner of a NZ citizen or resident for the purpose of a family visit. So, partners have been applying for general visitor visas to visit or join their families in New Zealand. This has been the practice for many years and our clients have not faced significant or ongoing problems.

From May 2019, Immigration New Zealand (INZ) changed the policy stating that applicants in a partnership with a NZ citizen or resident can no longer apply for a general visitor visa, instead must apply for a partnership-based visa although they may not be eligible under the Family Partnership Instructions – for example they may not be able to meet ‘living together’ requirement. That gives a good reason from immigration officers to decline those applicants’ visas. Clearly, the change in policy was amongst many other government initiatives directed at reducing the number of visas approved.

The irony is immigration officials are separating partners and children from their New Zealand based family members who have been granted work visas to work in industries where there is skills shortage. Their family members are not even allowed to visit them in New Zealand by not approving visitor visas. In these circumstances, governments initiatives to discourage family reunification could be seen as cruel and inhuman and at the least violation of international law (Brilmayer, Lea and Starr, Sonja, "Family Separation as a Violation of International Law" (2003). Faculty Scholarship Series. 2436) 

https://digitalcommons.law.yale.edu/fss_papers/2436

It will be interesting to see how many general visitor visa applications have been approved for partners of NZ citizens or residents compared to the number of applications lodged since May 2019.

IR Legal specialises in Immigration Law, Tax Law and AML/CFT Laws. Visit www.irlegal.lawyer | Phone (04) 566 1155 | (09) 299 1155 | (03) 377 1155 | WhatsApp 027 566 1155

#lawyer #taxlawyer #immigrationlawyer #tax #internationaltax #taxdisputes #taxinvestigations #taxaudits #taxdebt #taxcrimes #taxfraud #taxplanning #taxrulings #taxlitigation #taxrelief4immigrants #bankruptcy #liquidations #workvisa #visitorvisa #studentvisa #partnershipvisa #investmentvisa #residencevisa #immigrationappeals #investnewzealand #amlcft #amlcftriskassessments #amlcftcompliance #amlcftaudits #amlcftlegal

[ir-legal]

Taxation of Cryptocurrency Transactions

Bitcoin and other cryptocurrencies have seen considerable growth over the last 12 months. If you own and use any crypto personally or in business, you’ve probably started investigating your potential tax obligations.

In simplest terms, cryptocurrency is money that only exists digitally or virtually. Cryptocurrency uses cryptography and blockchain technology to regulate its generation and verify fund transfers. Cryptocurrencies can be transferred between people without using an intermediary, like a bank. Cryptocurrencies can be bought peer to peer, through online exchanges or by participating in Initial Coin Offerings. Bitcoin is the most well-known cryptocurrency. However, thousands of cryptocurrencies are available in the digital market right now. Ethereum, Ripple and Litecoin are other well-known examples.

How is cryptocurrency taxed? The answer can be complicated. Many nations are looking to formalise their taxation guidelines to help people identify their tax obligations. Unite States, United Kingdom, Australia, Singapore, and Japan have already issued formal tax regulations.

In New Zealand, the Inland Revenue (IRD) has published a Q&A on the income tax treatment of cryptocurrencies. According to the IRD, for tax purposes, cryptocurrency is property, not currency. This means foreign currency gain or loss provisions do not apply. They also say that cryptocurrency received as payment for goods or services is business income, which is taxable. This is seen as a barter transaction and you’ll need to calculate the value of the cryptocurrency in New Zealand Dollars (NZD) at the time it’s received. For some ‘alt coins’ (cryptocurrency other than Bitcoin) it may be necessary to convert into US dollars, or any other fiat currency, and then convert into NZD. 

The IRD says Bitcoin and similar cryptocurrencies generally don’t produce an income stream or provide any benefits, except when they’re sold or exchanged. This strongly suggests that cryptocurrencies are generally acquired with the purpose to sell or exchange them. So, for income tax purposes, cryptocurrencies have similar characteristics to gold bullion. Recently, the IRD issued an Issues Paper for public consultation on the issue of whether remuneration paid to an employee in cryptocurrency is subject to PAYE or FBT.

The answer is not so clear and hence the Issues Paper seeks your feedback on IRD’s initial views on how the tax laws apply. The IRD’s initial view is that, where an employee is paid part of their regular remuneration in cryptocurrency, this will be subject to PAYE. As such the FBT rules will not apply.

The IRD has been working on reaching a more definite view on a number of technical issues and is likely to issue more detailed information along with potential amendments to the tax legislation. In the meantime, there is still considerable uncertainty as to the tax treatment of cryptocurrencies as the current law does not easily accommodate these assets and the IRD has only released general guidelines so far. 

If you haven’t got your tax right, let us know as soon as you can so it can be corrected. We can advise you on the current legal position and let you consider making a voluntary disclosure to the IRD if necessary.

Ismail Rasheed, the owner of IR Legal, is a specialist tax lawyer with 18 years’ experience.  Phone (04) 566 1155 | (09) 299 1155 | Email: office@irlegal.lawyer | www.irlegal.lawyer

[ir-legal]

Tax treatment of withdrawals from foreign superannuation schemes

People living and working overseas may contribute to a foreign superannuation (“super”) scheme. For example, New Zealanders who live and work overseas may be required to contribute to a work-related scheme. Non-residents migrating to New Zealand may also have foreign super scheme interests (whether work-related or private) which they continue to hold after becoming New Zealand tax resident.

The tax treatment of withdrawals and payments from foreign super schemes is a complex areas of tax law. The treatment often comes down to the specific facts, including the nature of the scheme and whether the superannuation interest was acquired while the person was resident or non-resident.

From a New Zealand tax perspective, it is important to get the classification of the foreign super scheme correct. If the foreign super scheme does not fall within one of the specified categories in the Income Tax Act 2007, a different set of tax rules may apply. Practically determining the exact nature of a super scheme can be difficult and will turn on documentation. However, Inland Revenue is of the view that most foreign employment-related retirement schemes that individuals contribute to while working overseas will be foreign super schemes (see Tax Information Bulletin Vol 26, No 4, May 2014, at 14).

Inland Revenue also provides its position on the United States Individual Retirement Accounts (“IRA”):

“Sometimes savings in an individual’s retirement scheme can be used for purposes unrelated to retirement. For example, in the United States, individuals are able to establish a retirement saving accounts known as an Individual Retirement Account (“IRA”). An IRA is a savings account set up for the exclusive benefit of the individual or the individual’s beneficiaries. To discourage the use of IRAs for the purposes other than retirement, a 10% penalty tax is imposed on any withdrawals made from the account before retirement. Some withdrawals can be made without penalty – for example, when withdrawals are made to meet higher education expenses, first home purchases or medical expenses, no penalty tax is imposed.

Nevertheless, IRAs are established mainly for the purposes of providing retirement benefits and therefore on the face of it, such accounts are likely to be foreign super schemes for New Zealand tax purposes”.

Once again, it is crucial to determine the exact nature of the scheme involved. In some instances, where the underlying investments are held directly by the individual, or are held on bare trust for the individual, the Foreign Investment Fund rules may apply. In other instances, the interest in the super scheme may be a financial arrangement subject to the Financial Arrangement rules.

Ismail Rasheed, the owner of IR Legal, is a specialist tax lawyer with 18 years’ experience.  

Phone (04) 566 1155 | (09) 299 1155 | Email: office@irlegal.lawyer | www.irlegal.lawyer

[taxaccountanttaxattorney-blog]

NYC’s Best Tax Attorney and Tax Accountant

[taxaccountanttaxattorney-blog]

Tax Problems Solved!

We practice before the Internal Revenue Service (“IRS”) the New York State Department of Taxation and Finance (“NYS”) the Department of Justice Tax Division (“DOJ”) and the Defense Office of Hearings and Appeals (“DOHA”).

[taxaccountanttaxattorney-blog]

(via GIPHY)