The U.S. Internal Revenue Service (IRS) is sending letters to taxpayers who own cryptocurrency asking them to clear their back taxes or file amended tax returns regarding their holdings.
As per a news bulletin, the agency made an announcemnet about what it calls the “educational letters.” Sent last week, there are three variations of the letter that were sent.
The IRS adds in the statement that such letters will be sent to “more than 10,000 taxpayers” by the end of this month,” and that “the names of these taxpayers were obtained through various ongoing IRS compliance efforts.”
Chuck Rettig, IRS Commissioner said in a statement:
“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties. The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”
IRS began to work on new guidance regarding cryptocurrencies, in May, its first such effort since 2014. In the past, a number of organizations and industry advocates have asked the agency to update its guidance following its decision to treat cryptocurrencies as a form of intangible property for tax purposes.
A r/bitcoin subreddit user confirmed receiving such a letter on Thursday. Lawyer Tyson Cross, writing for Forbes, also detailed how a number of his crypto-focused clients have received this kind of letter from the IRS.
Image Source – Pixabay.com
Cryptocurrency Market Update