Can't get away with paying taxes? IRS sends tax warning letter to cryptocurrency holders again

Recently, CoinTracker published a blog post stating that its users have noticed that the IRS has begun sending another wave of cryptocurrency tax warning letters to US cryptocurrency users about whether they have properly reported their cryptocurrency transactions.

The Internal Revenue Service (Internal Revenue Service) is the tax agency of the U.S. federal government. The IRS is part of the U.S. Department of the Treasury and is under the direct leadership of the Commissioner of the Internal Revenue Service. In fact, as early as June 22, 2019, the IRS had already begun to review taxpayers’ cryptocurrency assets.

On August 21 this year, the US IRS also released a draft of Form 1040, "US Individual Income Tax Return". A question about virtual currency is designed in the main form, asking taxpayers whether to send, sell, buy and sell virtual currency and whether to obtain interest from it in 2020, while similar questions previously involved are set in the attached form.

ICBC Zhejiang Jinhua Branch opens digital RMB tax payment service: According to news on June 2, recently, ICBC Zhejiang Jinhua Branch joined forces with the Jinhua City Taxation Bureau and the Jinhua City Taxation Bureau Wucheng Branch to use the life payment function module of the ICBC Mobile Banking App. Realized the first tax payment business using digital renminbi in Jinhua City, marking the further enrichment of digital renminbi application scenarios in Jinhua. (City Financial News) [2022/6/2 3:58:55]

Be aware that the IRS tax form is the form used by taxpayers and tax-exempt agencies in the United States to provide financial information to the IRS. These forms are used to declare income, calculate various federal taxes, and provide other tax information required by the Internal Revenue Code. There are more than 800 tax forms and supplementary forms designated by the IRS. Among them, the common IRS tax forms include the 1040 form for filing federal personal income tax (non-US residents use the 1040NR form), the 990 form used by non-profit organizations, etc. the

News | The town of Zermatt, Switzerland accepts BTC for tax payment: Jinse Finance reported that the Swiss ski resort town of Zermatt (Zermatt) announced in its latest "digital love" strategy that it will now allow its residents to use BTC to pay taxes. Tax. [2020/1/31]

Regarding "the IRS moved virtual currency-related issues to the center of the first page of the 1040 form", Chandan Lodha, founder of crypto tax software company Cointracker, said in an interview that the IRS is taking cryptocurrency tax more seriously.

A recent survey by CryptoFundResearch noted that in the first half of 2020, 86% of crypto funds saw an increase in institutional interest in crypto investments; this, coupled with U.S. President Trump’s proposal to cut capital gains taxes, may further boost The popularity of digital assets in the market has led to a surge in crypto users. These complicate the issues facing the IRS and its crypto tax policy.

The Australian Taxation Office will keep a close eye on cryptocurrency investors to ensure they pay taxes: It is reported that the Australian Taxation Office will use data matching and "100-point identification" to track crypto investors, ensure compliance with bilateral tax treaties and anti-money laundering commitments, and Get more information from the traditionally anonymous crypto space and market to ensure they file their crypto taxes accurately this year. [2018/3/3]

Roger Brown, a former special counsel with the IRS, also said that arcane 1099 tax form rules have left many people unable to report payments and transactions. He also added that one of the key issues with accurately reporting payments and crypto-related transactions is that exchanges don’t always know a user’s entire transaction history.

However, in order to more effectively implement the encryption taxation plan, the IRS has collected and reviewed relevant information in various aspects.

Previously, the U.S. Internal Revenue Service (IRS) sought out third-party contractors to help it assess whether certain U.S. taxpayers were paying their taxes on crypto assets correctly.

On July 2 of this year, the IRS also collected information for a cryptocurrency investigation pilot program. The IRS wants information on potential tools that could be used to track transactions in different types of cryptocurrencies. Areas of focus for the pilot program include privacy coins such as XMR and ZEC, and layer-two transaction protocols such as the Lightning Network, according to a request for information published on June 30. Potential bidders have until July 14 to submit their responses.

Encryption is going to the mainstream, and it is becoming a feasible way to promote the growth of the cryptocurrency market by enacting bills to solve legal problems in the cryptocurrency field.

Regulators are well aware of the role of cryptocurrencies in facilitating tax evasion and money laundering. Those who think they can get away with not paying taxes face the risk of being audited, along with severe penalties. Transactions on the Bitcoin blockchain are mostly public, and it is only a matter of time before the IRS traces these transactions back to taxpayers. At the same time, it should be noted that paying taxes on Bitcoin will further enhance public confidence, and promote the healthy development of Bitcoin and other cryptocurrencies through appropriate regulatory measures and infrastructure improvements.

The IRS is also in the constant work of updating encryption guidance. At a summit organized by the Internal Revenue Service (IRS), representatives of the crypto industry and the CPA (American Institute of Certified Public Accountants) industry said that we need more clarity from the IRS on crypto tax issues, which so far have largely exist in a regulatory gray area. Even though the IRS was unable to address most of the concerns raised by the panelists, the summit provided an excellent opportunity for industry to speak, attendees said.

Sulolit Mukharjee, global head of tax information at Coinbase, pointed out that the willingness of the IRS to allow us to participate in such forums is actually a very healthy signal.

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