Our latest edition of Tax Breaks. Plus: Best places to retire abroad, Supreme Court tax cases, crypto regulations, audit guidance, interest rates, industry updates and more.
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It’s the opening weekend of the Paris 2024 Olympic Games—and that means we’ll be watching the best athletes in the world compete (sorry, I just got goosebumps).
I have always loved watching the Olympics. I make no apologies. I love all of it—from the opening ceremonies to the lovefest that is the closing ceremonies. When I was a kid, my brothers and I used to recreate some of the competitions in our front yards (I was very good at walking the tree log, I mean, beam). My kids did the same thing, reenacting almost every Olympic sport featured—including fencing and archery—inside my living room. It’s a chance for all of us to appreciate trying to be the best at something, no matter where you’re from.
The Olympics are also a fantastic opportunity to see some of the most beautiful places in the world. This year, events will be held not only in Paris, but also in Lyon, Marseilles, Nice, Versailles, and Tahiti (for surfing)—all perfect spots to visit and perhaps even retire.
As we become an increasingly global society, more Americans are looking to move abroad. If you’re looking for recommendations, Forbes has you covered. Our list of the top 24 countries and 96 recommended spots is based on costs, amenities, healthcare, climate risk, language, crime, and whether they welcome U.S. retirees. (Spoiler alert: Paris, France is on the list.)
Before you book your tickets, here are some of the key factors to consider, including affordability, taxes, medical insurance, and residence requirements.
(If you are thinking of moving, retiring, or just seeing the world, it’s also a good time to have a conversation about your estate planning.)
One city that didn’t make the list? Singapore (though I can attest that it’s an amazing place to visit). Singapore has, however, been in the news lately as the country recovers from its largest money laundering scandal ever—a $3 billion SGD (about $2.2 billion U.S.) caper that has rocked its reputation. The story started over a decade ago in the Philippines, where a group of 10 fraudsters ran an illegal offshore gambling operation targeting Chinese gamblers. The fraudulent casino operators stashed their cash in Singapore, where they routed their ill-gotten gains through cryptocurrencies, gold, luxury cars, and real estate.
Authorities still don’t know the true scope of illicit cryptocurrency activity. The U.N. has noted that cryptocurrency-related activity conducted by organized crime groups is “vastly underestimated”—the same has been said for cryptocurrency tax compliance. That’s one of the reasons that the U.S. is ramping up reporting requirements. Earlier this summer, the IRS released final regulations (☆) for sales, exchanges, transfers, and payment processing of digital assets. The final regulations incorporated many comments and recommendations submitted by industry leaders—and raised questions about what comes next.
The IRS also surprised tax experts by issuing a new version of its stock compensation auditing guide, which had not been updated since 2015. Developed as an internal manual for IRS employees, it offers businesses a helpful window into what IRS agents examine in audits related to equity compensation. It’s a heads-up on stock options, restricted stock, restricted stock units (RSUs), stock appreciation rights (SARs), phantom stock, and employee stock purchase plans (ESPPs) for anyone who has these benefits or advises clients with them.
Looking for more guidance? An IRS announcement from 2021—updated this year—confirms that the agency’s FAQs generally cannot be relied upon and goes on to describe the authority that can be relied upon. You may have seen some references to this issue before, but unfortunately, many taxpayers and professionals don’t know about it.
There’s one more thing: despite the fact that I enjoy archery (more on that below), I occasionally miss the mark. In last week’s newsletter, I inadvertently made a mistake when trying to condense a lot of information into a quick summary. When writing about the final regulations for inherited IRAs (☆), I failed to make a timing distinction: In the final regulations, the IRS confirmed that distributions which began before 2020 originally subject to the five year rule remain subject to the five year rule (they do not stretch). My apologies for the error, and many thanks to Eddie Romaguera, CPA, who caught my mistake. (I always read and appreciate feedback!)
Enjoy the Games!
Kelly Phillips Erb (Senior Writer, Tax)Taxes From A To Z: I Is For Interest Rates
You likely already know about interest—the charge for using borrowed money—but interest rates can have a significant impact on taxpayers.
The IRS charges you interest when you don’t pay on time, but the agency also may owe you interest if it doesn’t pay your refund on time. The IRS generally has 45 days to pay a tax refund before the law requires the tacking on of interest (assuming there are no problems with your return).
Interest rates change each quarter. For the calendar quarter beginning July 1, 2024, for individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily.
