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William Byrnes (Texas A&M) tax & compliance articles

TaxFacts Intelligence: Nov 28, 2022

Posted by William Byrnes on November 28, 2022

The Texas A&M Master and LL.M. programs (e.g. international tax, transfer pricing, wealth management, or risk management) are accepting applications from financial professionals and from lawyers. Over 850 enrolled, the enrollment for a course’s section is kept to between 20 and a maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

This week, we answer some common questions about Roth retirement accounts–and also discuss a pending Second Circuit case that is expected to address issues surrounding the relatively rare question of whether the government can garnish a client’s 401(k) under existing anti-alienation rules.  Finally, we have a summary of how the Treasury Department’s Greenbook proposals impact cryptocurrency traders starting in 2023.  Read on for more.

Can the Government Garnish a 401(k) to Pay Restitution?  The Second Circuit is currently considering whether the bankruptcy protection afforded to 401(k) assets extends to cases involving restitution awarded in criminal cases.  In United States v. Greebel, a $10 million restitution award was granted to the defendant’s victims in a criminal case.  The government sought to garnish the defendant’s 401(k) to cover the judgment.  Under the Mandatory Victims Restitution Act, the district court found that the retirement accounts at issue did not fall within an exception that allows all property of the defendant to be accessed to cover restitution in a criminal case (and that the generally applicable 25% cap does not apply under the CCPA).  The defendant appealed, arguing that he does not currently have access to the funds in the accounts under the terms of the plans.  However, another issue that may be resolved is whether retirement accounts can be garnished by the private victim (not the government) to cover restitution in a civil case.  This is an issue that could arise if the government did not enforce the restitution order and the victim was left to pursue action in civil court.  It also opens the issue of whether the accounts could be accessed to pay restitution awarded in a civil case.  For more information on the anti-alienation rules, visit Tax Facts Online.  Read more

Treasury Greenbook Offers Insight into Biden Administration’s Crypto Plan.  The Treasury Department’s General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals (known as the “greenbook”) offers insight into some of the administration’s plans for cryptocurrency regulation.  The proposals include plans to expand the Section 1058 nonrecognition treatment for loans of securities to loans of actively traded digital assets with similar terms starting in 2023.  The plan would also allow dealers and traders in actively traded digital assets to use the mark-to-market method for reporting gain or loss.  On the other hand, certain FATCA and foreign asset reporting would also be expanded to include cryptocurrency.  Accounts that hold assets maintained by foreign digital asset exchanges or service providers would be subject to reporting.  The thresholds for foreign asset reporting would be based on the aggregate value of the digital assets and any foreign assets that are covered by existing foreign asset reporting rules.  For more information on the tax treatment of bitcoin and other cryptocurrency, visit Tax Facts Online. Read more  

Unpacking the Difference Between a Roth 401(k) and Roth IRAs.  While Roth IRAs have been a standard retirement investment option for years, millions of Americans have only recently gained access to Roth 401(k) savings options through their employers.  Those clients may be wondering whether there’s any difference between their employer-sponsored Roth plan and a standard Roth IRA.  The answer is, of course, yes.  Roth 401(k)s allow an employee to stash away up to $20,500 in after-tax dollars in 2022 ($27,000 for clients aged 50 and older).  Roth IRAs, however, are limited to $6,000 ($7,000 with catch-up contributions).  Roth 401(k)s aren’t subject to any income restrictions, so even high earning clients can contribute directly.  On the other hand, Roth 401(k)s are subject to required minimum distribution rules once the client reaches age 72–although the client does have the option of rolling the funds into a Roth IRA, which aren’t subject to any lifetime RMD rules.  For more information on Roth accounts, visit Tax Facts Online.  Read more

Look in your Tax Facts Online app for our continuing analysis of 2022 and 2023 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier of law schools and is ranked in the top 10 for the employment of its graduating law students among U.S. law schools.

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