Internal Revenue Service reminds US citizens about US Crypto Taxation. The US IRS has issued a release, where the authority has reiterated that the US taxpayers have to include any cryptocurrency income on their annual tax forms
26 March, AtoZForex – The US Internal Revenue Service (IRS) has reiterated the fact that the taxpayers in the US have to include any cryptocurrency income on their annual tax forms. The agency has published a release this Friday, where it has stated that cryptocurrency transactions are taxable just like other forms of property. The IRS has referred to a release issued in 2014 stating that cryptocurrencies would be taxed.
Internal Revenue Service Reminds About US Crypto Taxation
Earlier, the IRS has stated that profits and losses on cryptocurrency would be regarded as capital gains in cases then cryptocurrency is being used as a capital asset. Likewise, salaries paid to employees in cryptocurrencies are taxable. The cryptocurrency payments made to independent contractors and service providers should be reported via Form 1099.
In its latest release, the US IRS has stated that payments made in cryptocurrencies should also be reported to the agency. The release reads:
“A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.”
It is worth to mention that the release is reiterating the fact that the IRS classifies cryptocurrencies as property. It stated:
“Taxpayers who do not properly report the income tax consequences of virtual currency transactions can be audited for those transactions and, when appropriate, can be liable for penalties and interest.”
Tax Evasion Is Listed as Criminal Charge
The penalties for tax evasion could include criminal prosecution “in more extreme situations,” according to the warning. In fact, tax evasion is listed as one possible criminal charge. In case a user is convicted of such, he/she could be jailed for up to five years and receive a $250,000 fine.
In the same fashion, users that file a false tax return could be given three years in jail and pay an identical $250,000 fine.
The US IRS has stated that “some taxpayers may be tempted to hide taxable income from the IRS.”
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