Cryptocurrencies

the US tax authorities will tighten the screws – Cryptocurrencies

cryptocurrency declaration usa

On the one hand, a Steven Mnuchin who wants to rush out a law that will hamper the development of cryptocurrencies. On the other hand, an American tax authorities increasing the pressure on cryptophiles to bail out the treasury. US citizens must now declare their crypto holdings or face criminal or civil prosecution.

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We take out the sticks

The former senior official of theIRS, Don Fort, indicated that theInternal Revenue Service (IRS) was preparing to take drastic measures to force taxpayers to declare their cryptocurrency holdings.

In an article co-authored with Lawrence Sannicandro and published on the site Law360, Strong warned that theIRS was preparing to move from a phase of education and awareness to a phase of stricter enforcement, which could result in civil and potentially criminal sanctions for those concerned.

This transition is expected to begin at the start of 2021. Strong underlines that with the convocation of Coinbase in 2018, theIRS began to prepare for the implementation of these repressive measures.

The exchange had been forced to provide account information for around 13,000 users.

TheIRS would have asked the exchange based at Luxembourg, Bitstamp, additional information on a US citizen.

The Treasury wants to stuff itself with cryptos

The pressure on cryptocurrency holders is due to a growing tax gap between the amount of taxes that should be paid to the treasure and the amount actually received.

Strong and Lawrence believe that undeclared cryptos are one of the main causes of this gap.

According to their calculation, the tax obligations related to cryptocurrencies would represent 3.2% of the tax gap of 381 billion dollars.

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The article concludes that the latest activities carried out by theIRS, such as the addition of a cryptocurrency question at the top of Form 1040, suggests that the US tax authorities are preparing to go to great lengths to stamp out non-payment of taxes.

The IRS quickly identified the weak point in the cryptosphere: exchanges with their KYC procedures. Crypto is “Think out the box”: a great theory, but in practice cryptophiles will have to keep pace to avoid being wracked by government institutions. Satoshi Nakamoto may have been a lion in creating Bitcoin (BTC), an alternative to fiats, but cryptos have become the cash cow of governments: you milk it to the last drop without taking care of it. As a thank you, we reserve a 4-star slaughterhouse for him.

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