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    Prominent Cryptocurrency Investor Faces Senate Tax Inquiry

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    The Finance Committee’s top Democrat sent a letter last month to Dan Morehead, the founder of Pantera Capital, about the investigation.A Senate committee is investigating whether a prominent cryptocurrency investor violated federal tax law to save hundreds of millions of dollars after he moved to Puerto Rico, a popular offshore tax haven, according to a letter reviewed by The New York Times.Senator Ron Wyden, an Oregon Democrat, sent the letter on Jan. 9 to Dan Morehead, the founder of Pantera Capital, one the largest crypto investment firms.The letter said the Senate Finance Committee was investigating tax compliance by wealthy Americans who had moved to Puerto Rico to take advantage of a special tax break for the island’s residents that can reduce tax bills to zero.The investigation was focused on people who had improperly applied the tax break to avoid paying taxes on income that was earned outside Puerto Rico, according to the letter.“In most cases, the majority of the gain is actually U.S. source income, reportable on U.S. tax returns, and subject to U.S. tax,” the letter said.The letter requested detailed information from Mr. Morehead about $850 million in investment profits he made after moving to Puerto Rico in 2020, noting that he “may have treated” the gains as exempt from U.S. taxes.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      UK Budget: Labour Party to Raise Capital Gains and Inheritance Taxes

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      Rachel Reeves, the new finance minister, announced substantial tax increases in her first budget as she sought to strengthen public finances and services.The new British government, led by the Labour Party, said it would substantially raise taxes and borrow more for investment as it sought to steer the country out of a long run of economic stagnation.Rachel Reeves, the chancellor of the Exchequer, delivered her first budget — and the first one ever by a woman — in Parliament on Wednesday. In a nearly 80-minute speech, Ms. Reeves announced about 40 billion pounds ($51.8 billion) in tax increases, more than half of which would come from higher taxes that employers pay on their workers’ salaries. She also increased capital gains and inheritance taxes.“The choices that I have made today are the right choices for our country,” Ms. Reeves said. “That doesn’t mean these choices are easy.”The budget was the first big opportunity for the Labour Party to set Britain’s economic agenda after it was swept into office with a large majority in July’s general election after 14 years out of power.But after a turbulent few months in office for the Labour Party, the budget has been seen as a reset moment for the party itself. Keir Starmer, the prime minister, said this week that the budget would “light the way” toward the government’s priorities of ensuring financial stability, improving public services and encouraging investment.For months, Ms. Reeves has warned that this budget would include “difficult” choices, signaling that Britons will have to swallow pain now for a bigger payoff later. These choices, government officials have said, will help the government achieve its goal of making Britain the fastest-growing economy in the Group of 7.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      I.R.S. Failed to Police Puerto Rico Tax Break, Whistle-Blower Says

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      An insider accused the agency of failing to scrutinize a lucrative tax break in Puerto Rico designed to lure wealthy Americans to the island.For the past decade, thousands of wealthy Americans have been flocking to Puerto Rico to take advantage of a tax break that can cut their tax bills to zero. For nearly as long, there have been allegations that the benefit enables multimillionaires to avoid paying what they owe when they reap big investment profits.Now, an Internal Revenue Service insider has accused the agency of failing to police the tax break. Despite a high-profile campaign announced more than three years ago to unearth possible abuse, the agency has audited barely two dozen people and has collected back taxes from none, according to a letter that an agency insider wrote this year to lawmakers and that has been reviewed by The New York Times, as well as interviews with I.R.S. officials.Senate officials have begun an investigation into the whistle-blower’s allegations about the Puerto Rican tax benefit.“It’s been three years since the I.R.S. announced its enforcement campaign on this issue,” said Senator Ron Wyden, Democrat of Oregon and chairman of the Senate Finance Committee. “It needs to pick up the pace.”Hamstrung by decades of budget cuts, the I.R.S. has regularly struggled to crack down on tax avoidance by the wealthiest Americans and large companies. Audits of millionaires have declined more than 80 percent over the past decade, reaching record lows. The agency rarely examines giant private equity firms. And the annual “tax gap” — the difference between taxes that are owed and what is paid — is estimated to be $600 billion.In an interview, Danny Werfel, the I.R.S. commissioner, said the agency’s enforcement campaign in Puerto Rico, while still in its “early chapters,” was accelerating because of the $80 billion in new funding that the 2022 Inflation Reduction Act provided to the agency.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More