Cryptocurrency
What Happened In The Cryptocurrency Tax Space In Q3 2020
What Happened In The Cryptocurrency Tax Space In Q3 2020: As reported on Forbes, “As we end the Q3 2020, let’s look at what happened in the past quarter in the crypto tax compliance world (What Happened In the Cryptocurrency Tax Space In Q2 2020). Infamous Crypto Question Was Moved To The Front & Center […]
What Happened In The Cryptocurrency Tax Space In Q3 2020:
As reported on Forbes, “As we end the Q3 2020, let’s look at what happened in the past quarter in the crypto tax compliance world (What Happened In the Cryptocurrency Tax Space In Q2 2020).
Infamous Crypto Question Was Moved To The Front & Center Of Form 1040
“The 2020 draft Form 1040 released by the IRS on August, 18, 2020 showed that the infamous virtual currency question which was first introduced on Schedule 1 for the 2019 tax year has been moved to the front and center of the Form 1040. With this placement, every US taxpayer filing a tax return in 2020 will have to answer this question and file applicable forms if they have cryptocurrency transactions. This showed how seriously the IRS is looking into the crypto space.
Financial Rewards To Catch Crypto Tax Evaders
“In this quarter, the IRS awarded a $250,000 contract to a crypto tracing software company to help with ongoing crypto tax audits. The criminal investigation division of the IRS also published a $625,00 bounty to anyone who can break into Monero and Lightning networks.
“We saw crypto users receiving another round of crypto tax warning letters printed on August, 14, 2020. The IRS first sent these out to 10,000 taxpayers in 2019. The warning letters came in three variations: Letter 6173, Letter6174 & Letter 6174-A.
“In August 2020, we noticed both small and large crypto users getting letter 6174-As. These letters alerted recipients about their crypto tax reporting obligations and recommended amending the tax returns to fix errors and omissions…”