The cryptocurrency industry has been the subject of several regulatory concerns in the last few years. Most of these concerns have often been aimed at two major sectors of the industry: security and the vulnerability to massive fraud.
When the cryptocurrency industry grew, so did the size and scope of the scams. The United States Internal Revenue Service [IRS] was the latest agency to move into the virtual asset world with a plan to combat cryptocurrency tax evasion.
Just last week, the IRS released a paper that requested independent experts to help crackdown on cryptocurrency tax evasion. The [SoW] report produced by the IRS set out their criteria, which focused mainly on tax returns on cryptocurrency gains/losses. Sources close to the IRS have reported that it would cover the taxation of small-time players
An excerpt from the SoW added:
“Taxpayer transactions can be relatively simple, or in some instances, they can have hundreds of thousands of digital asset transactions in a year.”
Reports have indicated that the IRS has been tracking the cryptocurrency space for some time. One of the first steps to be taken by the IRS would include trading of cryptocurrencies and related procedures. The IRS recognized that billions of dollars worth of transactions occur on these exchanges, while fraud occurs simultaneously.
At present, traders still have the option to obtain a crypto tax software and calculate the exact rate to be reported. The IRS had to reveal this information because reports circulated that the Agency needed requesting crypto firms to disclose user data.
The latest move from the IRS was met with some trepidation by officials in the cryptocurrency space. David Kremmer, Chief Executive Officer of CryptoTrader. Tax claimed that a lot of people in the industry would not be pleased with the decision, but those legitimate traders would have nothing to worry about.
