Cryptocurrency investors who are trying to dodge taxes have been caught in the crosshairs of the Internal Revenue Service, WSJ reports. If you haven’t gotten a surprise letter from the much-feared agency, it could be the right time to hurry up.
Don’t play games with the IRS
According to criminal tax expert Bryan Skarlatos, those who failed to pay a visit to their local IRS office should consider putting on their running shoes or face serious consequences. You can now even lose your passport if owe more than $52,000 in overdue taxes.
I tell them, ‘It’s time to put your running shoes on. You must get to the IRS before they find you, especially if you got a letter,” said the New York lawyer.
Skarlatos points out that the IRS deals with cryptocurrency bagholders similarly to the owners of offshore bank accounts. The increasing scrutiny over cryptocurrencies came after the recent crypto rally that ignited even more interest in the nascent asset class.
Coinbase, the leading American cryptocurrency exchange, already has more than 30 mln users, which exceeds Bitcoin’s maximum circulating supply.
Not up for the task
James Foust of Coin Center states that there are no ‘clear answers,’ which explains why even responsible actors are struggling to fill their taxes. The IRS failed to provide clear guidelines on paying cryptocurrency taxes.
To explain how burdensome tax reporting can get, Form 8949, an IRS form that includes all their capital gains and losses, will probably have thousands and thousands of entries if you are a crypto trader (considering how volatile the market is).