In the latest, Internal Revenue Service or IRS crypto letters start arriving at cryptocurrency traders and investors in the United States of America, Cryptopolitan.com received a copy of the letter from one of our sources.
The U.S Department of Treasury’s IRS recently announced that it would be sending letters to cryptocurrency traders and investors suspected to be evading taxes. It appears that the first batch of these letters to over ten thousand (10,000) cryptocurrency holders identified have been dispatched.
The letter informs the user that the IRS has found them dealing in cryptocurrency, however, their tax information does not reflect the same and digital currencies including cryptocurrencies and other altcoins are taxable assets.
The letter invites the users to check the correct tax filing and reporting procedure on the official websites and must file a correction or the income statement with details of all the sales, exchanges, and other dispositions of the virtual currency.
The letter reads:
“Generally, U.S taxpayer must report all sales, exchanges, and other dispositions of virtual currency. An exchange of a virtual currency (such as Bitcoin, Ether, etc.) includes the use of the virtual currency to pay for goods, services, or other property, including another virtual currency such as exchanging Bitcoin for Ether.”
The letter goes on to explain that the jurisdiction applies to accounts held abroad, it read:
“This obligation applies regardless of whether the account is held in the U.S or abroad.”
The letter further suggests one of the following two actions calling for a response with a thirty-day deadline to the cryptocurrency holders. By the deadline, users should either file their returns for the years in question or file correction of the previously filed taxation information.
The letter further reads the rights to representation shall the respondent choose to hire a representative and file proper documentation for the representative.