IRS Sends Cryptocurrency Income Taxes

The United States Revenue Service (IRS) has begun a mass mailing of letters to cryptocurrency investors demanding to report their income from cryptocurrency transactions.

According to Forbes, a lawyer specializing in tax issues cryptocurrency Tyson Cross (Tyson Cross) said that several of his clients received a letter from the IRS “6174-A”. In the letter, the Internal Revenue Service requires citizens to report on their income from cryptocurrency transactions, otherwise they may face “law enforcement actions in the future.”

Cross notes that, based on the text of the letter, one may get the impression that it is personal in nature and sent only to some taxpayers. However, the lawyer argues that, most likely, this is a mass mailing, designed to encourage voluntary compliance with tax requirements.

Although the agency could identify tax frauds and send letters to specific individuals, Cross states that more than a dozen of his clients, each of whom accurately reported on their earnings from trading in cryptocurrencies, also received these letters.

According to him, it is much more likely that the IRS used a list of taxpayers for distribution, received in 2018 from Coinbase, and conducted a comprehensive campaign to exert psychological pressure on investors. He notes:

“This indicates that the IRS sends letters to taxpayers in a“ phishing ”campaign, without having a clear idea of ​​whether a particular person paid taxes or not.”

Cross writes that several other lawyers specializing in tax cryptocurrency told him that their clients, who also submitted all the necessary information to the IRS, received similar letters. Cross advises investors not to panic if they receive a letter, but to pay special attention to filling out tax returns.

Recently it was reported that the US Tax Service plans to develop more sophisticated ways to track traders who evade paying taxes on cryptocurrency revenues. In addition, in May of this year, the IRS announced plans to issue new tax recommendations on cryptocurrencies.