The Internal Revenue Service (IRS), which is the United States’ tax body issued a warning or an ultimatum (depends on how one sees it) to cryptocurrency holders. News portal, Finance Magnates, reported that over 10,000 warnings, in the form of letters were sent to cryptocurrency holders. In a nutshell, the warning said- report your crypto on your tax form, or else, pay the price.
The portal further reported that there were three variations of the letter sent out to cryptocurrency traders. The letters were customized as per the information that the IRS had, on each individual. One of the variations included the letter demanding the recipient that he/she was complying with the tax law, under the threat of perjury.
A user said he got a letter from the IRS. He stated, “Anyone get one of these IRS notices? I paid taxes on bitcoin gains during last two bubbles, so I’m guessing they send these to all people who declared #bitcoin gains? I declared a cost basis of 0…which is essentially true (I mined back in 2010, so I spent like pennies)…”
Anyone get one of these IRS notices? I payed taxes on bitcoin gains during last two bubbles, so I’m guessing they send these to all people who declared #bitcoin gains? I declared a cost basis of 0…which is essentially true (I mined back in 2010, so I spent like pennies)… pic.twitter.com/VAAUCy2cKg
— ₿ Goss, MD BTC/LN⚡ 🔑 📡 👂 📢 (@_drgo) July 26, 2019
IRS Commissions Chuck Rettig said that taxpayers should take these warnings very seriously. He was quoted as saying, “Taxpayers should take these letters very seriously. The IRS is expanding efforts involving virtual currency, including increased use of data analytics.”
The founder of crypto tax company, Sean Ryan, who has named the company after his own name said that the IRS had set up working groups to “identify potential tax evaders.”
Last year, we had reported that a new coalition, called ‘The Joint Chiefs of Global Tax Enforcement’ (J5 in short) was formed by tax enforcement agencies from five different countries to combat tax crimes, including cryptocurrencies. The five participating countries were the United States, United Kingdom, Australia, Canada, and Netherlands.
With the IRS and the J5 on trail, crypto tax evaders will have their work cut out for them.
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