According to the wall street journal, america's horrendous tax authorities are issuing strong warnings to millions of cryptocurrency holders who do not comply with the law that they must submit the required forms.This year's first page of the tax return will require filers to report whether they have received or exchanged any virtual currency.
The change in attitude towards cryptocurrency and other recent actions show that the IRS is taking the threat of cryptocurrency to the tax system seriously, whether it is a non compliant enthusiast or a complex international criminal. In two recent non tax criminal cases, one involving theft in North Korea and the other involving the sale of child pornography by a Dutch national, the IRS has provided critical assistance because of its growing expertise in cryptocurrency.
Many cryptocurrency users are angry at the IRS's guidance, which treats bitcoin, ether and their cryptocurrencies as property, not money. As a result, if the holder uses it to buy something or exchange one cryptocurrency for another, capital gains or losses are usually reported on the tax return.
Meanwhile, the IRS is pushing for other encryption compliance measures. Earlier this month, it offered as much as $625,000 in rewards to password-breakers who could crack so-called privacy coins such as monero, claiming they couldn't attract illegal activity. The IRS is also sending a new round of letters to cryptocurrency holders who may not have complied with tax rules, expanding to about 10,000 last year. Tax experts say recipients are often Coinbase customers, Coinbase are ordered by the federal court to give information about some accounts to the IRS.