IRS reminds Taxpayers To Report Cryptocurrency Gains.
Mar 25, 2018 Posted / 1490 Views
On 23 March 2018, the Internal Revenue Service (IRS) issued a release to remind taxpayers that “ Income from virtual currency transactions is reportable on their income tax returns.” The agency provided a link to its 2014 guidance, which explained that “for federal tax purposes, virtual currency is treated as property.”. It also warned, “Taxpayers who do not properly report the income tax consequences of virtual currency transactions can be audited for those transactions and, when appropriate, can be liable for penalties and interest.”
“In more extreme situations, taxpayers could be subject to criminal prosecution for failing to properly report the income tax consequences of virtual currency transactions. Criminal charges could include tax evasion and filing a false tax return,” the IRS statement read.
“Anyone convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Anyone convicted of filing a false return is subject to a prison term of up to three years and a fine of up to $250,000.”
With this year’s April 17 tax filing deadline fast approaching, many virtual currency traders are sweating over their tax returns. They’re confused by the complicated rules, many of them stemming from guidelines issued by the I.R.S. in 2014, governing the taxation of virtual currencies. They’re afraid that the unbelievable profits created by last year’s cryptocurrency boom, which sent currencies like Bitcoin and Ether skyrocketing and fabricated a whole new group of crypto-millionaires, have left them with huge tax bills. They are worried about drawing the eye of the Internal Revenue Service towards them.
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