US residents have two more months to submit their annual federal tax returns. The Internal Revenue Service will treat very harshly Bitcoin tax cheats.
The agency has assigned a team of elite criminal agents to investigate whether Bitcoin and other cryptocurrencies are being used to cheat the taxman.
According to IRS chief Don Fort, it’s possible to use Bitcoin and other cryptocurrencies in the same way as foreign bank accounts to facilitate tax evasion. He also informed that the agency hasn’t charged anyone yet, but the cases will come. Under current US law, cryptocurrency owners are required to pay taxes on profits realized from any cryptocurrency transaction. It is clear that if you have realized profits from cryptocurrency investments, you will have to pay taxes.
This new technology is a big challenge for the IRS, they need to educate themselves on what is a blockchain. The agency lost its key staffers since 2011 on account of budget cuts. This team will help the agency to return its full strength, complete with its own crew of blockchain experts.
There are three so-called types of bitcoiner: 1) those intending to pay, 2) those hoping the IRS will not hunt them, because there are bigger “fish to fry”, 3) those willing not to pay. They even ready for moving to Puerto Rico. Of course, days of wide-scale cryptocurrency tax avoidance are almost in the past.