LOS ANGELES — The U.S. Internal Revenue Service is now sending notices to taxpayers that have performed virtual currency transactions without reporting any income or paying the resulting tax on those transactions.
It is an issue of concern for forward-leaning adult marketers, especially those that have embraced cryptocurrencies for their perceived anonymity and tax advantages — both common notions which seem to be in question as the government now targets those users who it seems are neither anonymous nor free from their federal tax obligations.
“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,” said IRS Commissioner Chuck Rettig. “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.”
The IRS began mailing the letters to taxpayers last week and estimates that by the end of August, more than 10,000 such letters will be sent, and noted that the names of these targeted taxpayers were obtained through ongoing IRS compliance efforts.
The move is a follow-up to last year’s Virtual Currency Compliance campaign, with the IRS stating it “will remain actively engaged in addressing non-compliance related to virtual currency transactions through a variety of efforts, ranging from taxpayer education to audits to criminal investigations.”
The use of virtual currency is an ongoing area of focus for IRS Criminal Investigation and additional legal guidance is expected in the near future, with some offenders potentially subject to criminal prosecution.
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