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