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The IRS starts hunting down investors who don’t declare Bitcoin

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The Internal Revenue Service, also known as the IRS, is keeping an eye on cryptocurrencies and increasingly appears to be interested in obtaining vital information about investors.

According to Market Watch, the U.S. federal agency has called on the administrative side of brokerage Circle and Poloniex to reveal information from customers who invest in Bitcoin.

According to the website, the idea is to ensure that cryptocurrency buyers are correctly reporting all gains and values ​​in portfolios, in addition to, of course, paying the necessary taxes to the government.

With this, the IRS wants brokers to provide reports on user account registration, activity for each account, and transaction history, in addition to other materials. The current focus is on all investors who had transactions above US$20,000 during the years 2016 to 2020.

For the IRS, cryptocurrencies are classified as property. Whenever a property is sold at a profit, it is necessary to pay a tax on the gain. But, of course, for that, the IRS must know that the transaction took place. According to Richard Stearns, responsible for signing the summons orders for brokers, the process has a logical basis, since it is quite possible that many cryptocurrency investors are not following the tax rules correctly.

READ more:  Bitcoin passes US$38,000 and liquidates US$900 million to bearish traders

For IRS commissioner Chuck Rettig, these calls also serve as a big wake-up call for US investors.

“The message for US taxpayers is clear, the IRS is working to ensure that they are completely compliant with the rules for using virtual currencies. We will guarantee the law where we do not encounter problems of fraud or rule-breaking. ”

The IRS’s interest in cryptocurrencies is nothing new, going well before 2017 since the idea of ​​Bitcoin being a way to make more anonymous transactions started to spread.

Now, with cryptocurrencies once again gaining momentum, especially at a time when the fiat currency presents a moment of weakness, it is easy to understand why the U.S. Federal Revenue would be even more interested in keeping Bitcoin taxation increasingly “strong”, even hiring consultants who can assist in tracking digital currencies.

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The information expressed in this article is solely those of the author and do not necessarily reflect the vies of CryptoDeFinance.  Each and every investment and trading move involves high risk. You should always conduct your own research when making a decision in crypto investment.
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Bruno Marques

Hi! I am the CEO/Founder of Crypto DeFinance, and I am an Enthusiast crypto investor. I started this project so we can provide you with carefully curated news. If you like us and our news, share the posts and comment. Your visit and interaction is very important to us.
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