TL;DR Breakdown
- IRS looking to enforce its crypto tax rules
- Numbers of countries looking to impose tax on the industry has increased lately
A former top investigator, Don Fort, with the Internal Revenue Service (IRS) has warned that the agency would be all out to penalize crypto holders who fail to declare their holdings in order to be taxed appropriately by the authorities.
According to him, the agency would focus on how it can pursue civil and also criminal penalties against defaulters. He further went on to add that the agency had previously worked assiduously on informing the general public on the collection process, the focus has now shifted on how to enforce the collections of such crypto taxes.
He further highlighted how the IRS has already been in contact with the different crypto exchanges on how to gather their user information. He mentioned how the collection body had reached out to Coinbase in 2018 who provided them with data on over 13,000 users. He also cited how the agency reached out to Bitstamp, a crypto exchange firm based in Luxembourg, for information on one of its American user.
These agencies were cooperative and as such, the availability of such information could lead to a potential crackdown on defaulters of crypto tax.
Fort concluded by saying that IRS is increasing its effort to make sure that underpayment of taxes is cut out and that it would be foolhardy for any crypto holder to underestimate the government. Some professional help can be obtained from TurboTax Live online CPAs and tax experts.
Crypto tax policies increasing
The numbers of countries that have shown interest in taxing the crypto industry has increased lately.
We reported that India was thinking of implementing a goods and services tax (GST) on massive Bitcoin transactions in the country. According to the report, the country was looking to implement a 18% tax on the industry.
Israel also is looking to increase government revenue through taxing the crypto industry. The country has already started contacting its residents who are crypto holders to declare their holdings so that they can be taxed appropriately.
