IRS is going after cryptocurrency users with warning letters about back taxes

[Eugene]

Source: CNN Business

IRS is going after cryptocurrency users with warning letters about back taxes

By Brian Fung and Anna Bahney CNN Business
Updated 2039 GMT (0439 HKT) July 26, 2019

Washington (CNN Business) — The IRS has begun sending thousands of letters to US cryptocurrency holders warning them they may have incorrectly reported the taxes they owe on their transactions involving digital money.

As many as 10,000 taxpayers will have received the letters by the end of August, the IRS said on Friday. Regulators identified the taxpayers through what the agency described as "ongoing IRS compliance efforts."

The IRS is sending out three types of letters to taxpayers — known as Letter 6173, Letter 6174 and Letter 6174-A — depending on the severity of the issue. On social media, some people who claim to have received the letters say that one version simply asks taxpayers to review their returns and file an amended one if necessary. Another is a more serious warning of possible noncompliance with US tax law and potential IRS enforcement. And a third requires a response, or the recipient will be audited.

On Thursday night, Nicole Green, a tax preparation professional and certified Bitcoin professional with NGG Tax Group, received an urgent email from a client about possible unreported cryptocurrency transactions.

"No one is talking taxes at 10 p.m. at night in the middle of July," Green told CNN Business. "But this letter got their attention and they were freaked out."

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Read more: https://edition.cnn.com/2019/07/26/tech/irs-cryptocurrency-taxes/index.html

[customerserviceguy]

1. Just a scare tactic

to get a few weak people to pay more taxes, but when the whole "funny money" cryptocurrency thing goes bust, don't expect them to allow any losses against real income.