Cryptocurrency News

The IRS Perfectly Knows How Much Bitcoin Users owe in Taxes

The IRS doesn’t take kindly to people purposefully evading taxesThis is especially true when those users are also cryptocurrency holders or traders. Despite sending out thousands of letters in recent weeks, the agency is already stepping up its game. A new version is making the rounds which is a lot more straightforward and firm. It also shows how the agency is looking at Bitcoin and altcoins in 2019. 

Specific Owed Amounts

Whereas the first batch of letters – which comes in two different versions – was more of a guidance tool than actual demand, the new letters are very different. Not only does it confirm the IRS has a database on Bitcoin traders, but it also explains how much taxes are owed. In some cases, this amount may be lower than traders expected. Even so, it would be best to not ignore this letter.

It is also heartwarming to see the calculations on paper. Up until now, it was a bit unclear how the IRS would calculate owed taxes for cryptocurrency traders. That is no longer the case, as these letters are rather detailed. There is also a “due date” in the letter, which seemingly gives recipients a four-month period to pay the requested amount in full. 

Fixing Discrepancies

Most US-based cryptocurrency users will report their taxes correctly. That does not automatically mean the provided information is 100% correct. Even those users might receive a letter from the IRS over the coming weeks. There is always a chance a discrepancy has arisen. As such, the government agency will inform users and ensure the issue is rectified as soon as possible. 

It is still possible for recipients of CP 2000 letters to dispute the amount in question. Doing so comes at a risk as there is no indication the agency will back down on its requests. For those willing to explore this option, there is a thirty-day period during which comments can be submitted. Given how these amounts are based on capital gains in general, rather than gains and losses individually, there seems to be little room for error overall. 

Filing Taxes Properly

All of these efforts by the IRS sends a clear signal to American cryptocurrency holders and traders. It is in everyone’s best interest if taxes are filed correctly. Incurring the wrath of the government agency would not be beneficial at all. Luckily, there are numerous tools which can help users out in this regard. There is no reason to incorrectly file taxes in 2019 and beyond. 

These tools will serve multiple purposes. Not only will they get users in the good graces of the IRS, but they also provide users with an estimate as to which amounts might be owed. Cross-referencing these calculations with the CP2000 information can provide valuable insights.. 

Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.


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