Fun

IRS Sends Fresh Round of Tax Warning Letters to Cryptocurrency Owners

News Feed - 2020-08-27 05:08:11

IRS Sends Fresh Round of Tax Warning Letters to Cryptocurrency Owners


The U.S. Internal Revenue Service (IRS) has begun sending new warning letters to cryptocurrency owners. This followed the tax agency prioritizing cryptocurrency on its tax forms. “The IRS is getting very serious about cryptocurrency tax compliance,” a tax expert told news.Bitcoin.com.IRS Sending New Warning Letters


The IRS has started sending out a new round of tax letters to cryptocurrency owners. Several tax service providers revealed on Tuesday that their clients have received a warning letter from the IRS similar to those the agency sent to about 10,000 crypto owners last year.


There are three types of letters. The first type, Letter 6173, specifies a date by which the taxpayer must respond or their tax account will be examined by the agency. The other two, Letter 6174 and 6174-A, only remind taxpayers of their tax obligations. The Taxpayer Advocate Service, an independent organization within the IRS, has said that the IRS letters violate taxpayers’ rights.


“We have information that you have or had one or more accounts containing virtual currency but may not have properly reported your transactions involving virtual currency, which include cryptocurrency and non-crypto virtual currencies,” reads Letter 6174-A, shared by bitcoin tax software provider Cointracker. The letter is dated Aug. 14.


The IRS letter proceeds to advise cryptocurrency owners that if they did not accurately report the cryptocurrency transactions on the federal income tax return, they should “file amended returns or delinquent returns.” The agency warned:If you do not accurately report your virtual currency transactions, you may be subject to future civil and criminal enforcement activity.




Cointracker co-founder Chandan Lodha shared with news.Bitcoin.com on Tuesday: “We don’t know for sure where the IRS got the user list, however we have seen Coinbase as a common exchange synced across users who are receiving these letters so that does seem likely.”


He continued: “We also know from the US government that in addition to Coinbase subpoena data, they also receive 1099 reports from exchanges, have subpoenaed other exchanges including non-US exchanges like Bitstamp, and are using blockchain analytics software like Chainalysis, Coinbase analytics, and Palantir. They have even gone so as far as to start trying to de-anonymize on-chain privacy coin transactions.”


Lodha outlined that in the past 12 months, the IRS sent out warning letters, added a cryptocurrency question to Schedule 1, issued new crypto tax guidance, and solicited contractors to help them with crypto tax audits. Last week, the agency moved the crypto tax question from Schedule 1 to the front page of Form 1040. He emphasized:The trend seems to be pretty clear: the IRS is getting very serious about cryptocurrency tax compliance.


What do you think about the IRS’ warning letters to crypto owners? Let us know in the comments section below.IRS Prioritizes Cryptocurrency, Now First Question on 1040 Tax FormTAXES | 4 days ago305 Venezuelan Municipalities to Collect Tax in Cryptocurrency PetroTAXES | Aug 13, 2020Tags in this storyirs bitcoin, irs crypto letters, irs cryptocurrency, irs letters to crypto owners, irs tax crypto, irs tax letters, tax warning letters


Image Credits: Shutterstock, Pixabay, Wiki CommonsUse Bitcoin and Bitcoin Cash to play online casino games here.Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.Read disclaimerShow comments

News Feed

Ex-Digitex Futures Exchange CEO pleads guilty to violating Bank Secrecy Act
Turner Wright2 hours agoEx-Digitex Futures Exchange CEO pleads guilty to violating Bank Secrecy ActU.S. authorities indicted former Digitex CEO Adam Todd in February for failure to implement and maintain an effective Ant
Pixelverse to put Pudgy Penguin character on Telegram mini game
Ezra Reguerra10 hours agoPixelverse to put Pudgy Penguin character on Telegram mini gameA Pudgy Penguins character integrates into Pixelverse, joining characters like Doge from Dogecoin and Mew from the Solana memecoin M
William Suberg8 hours ago‘Buy the rumor, sell the news’ — Bitcoin ETF may spark TradFi sell-offBitcoin retail investors may end up with a hot potato if the spot ETF go-ahead plays out like gold 20 years ago, analys
Standing Together Against Disasters: CoinEx Charity Passes on the Spirit of Charity
Standing Together Against Disasters: CoinEx Charity Passes on the Spirit of Charity press release PRESS RELEASE. Every year, natural disasters like earthquakes, hurricanes, and floo
Tom Mitchelhill3 hours agoOpenSea ‘unaware’ of any involvement of former exec in $60M rug pullA former OpenSea employee has been accused of assisting the infamous AnubisDAO rug pull in 2021, but some commentators hav
Bitcoin, Ethereum Technical Analysis: BTC up to $30,000 to Start the Week
Bitcoin, Ethereum Technical Analysis: BTC up to $30,000 to Start the Week Bitcoin rose above $30,000 to start the week, with bearish sentiment marginally fading as we head into Jun
BMW Partners With Coinweb to Develop Blockchain-Based Vehicle Financing Automation and Loyalty Program in Thailand
BMW Partners With Coinweb to Develop Blockchain-Based Vehicle Financing Automation and Loyalty Program in Thailand BMW, the luxury car manufacturer, has partnered with Coinweb, a d
Getting In and Out of the Cryptocurrency Economy Can Be Costly
Getting In and Out of the Cryptocurrency Economy Can Be Costly Since bitcoin and digital currencies have become popular, fiat on and off-ramps have sprung up that allow investors
Goldman Sachs Considering Bitcoin is Exactly How Best Wallet Is Slated to Reach $4.4bn of the Non-Custodial Market
Este artículo también está disponible en español. Sentiment from the head of a Wall Street giant signals good news for the cryptocurrency economy. Goldman Sachs CEO David
Marathon Buys Additional 10,000 Antminers to Become Largest US Bitcoin Miner
Marathon Buys Additional 10,000 Antminers to Become Largest US Bitcoin Miner Nasdaq-listed Marathon Patent Group is buying 10,000 of the more efficient Antminer
Bitrue Is Launching a New Yield Farming Hub
Bitrue Is Launching a New Yield Farming Hub press release PRESS RELEASE. In the world of cryptocurrencies, it is important for any crypto exchange to offer plenty of different optio
Report: Bitcoin Mining Firm Northern Data AG Plans for a $500 Million IPO
Report: Bitcoin Mining Firm Northern Data AG Plans for a $500 Million IPO While the public prepares for the upcoming Coinbase public offering, the mining firm No