Tax Updates For Crypto Users
The initial impression about the crypto was that it's not in the tax net and people use this easily without any tax deduction. But now the scenario is changing and governments and institutions are working on that to collect tax and bring the cryptocurrency in the tax net.
IRS is working on that and announced “The Virtual Currency Compliance campaign will address noncompliance related to the use of virtual currency through multiple treatment streams, including outreach and examinations. Taxpayers with unreported virtual currency transactions are urged to correct their returns as soon as practicable.”
Deputy Chief IRS-CI, Jim Lee said in the report “IRS-CI almost always has jurisdiction. There is no better example of this than in tracing cryptocurrency transactions. Cryptocurrencies are undermining the financial and tax system. Companies pay employees in cryptocurrency or receive crypto for goods/services. They do not pay taxes and entities shift income to offshore exchanges with no reporting requirements, utilizing exchanges with little to no AML practices. Understanding the advancements in this area and staying.”