The United States tax office IRS has issued cryptocurrency tax refunds to many cryptocurrency users. Those who have declared their cryptographic holdings and paid the appropriate taxes on them.
18 November 2019, AtoZMarkets – The US Internal Revenue Service (IRS) issued refunds to several cryptocurrency holders who declared their funds and paid taxes on them. Crypto traders were required to deposit their cryptographic transactions. That resulted in gains and losses at the time of deposit.
Earlier this year, the IRS sent letters to 10,000 cryptocurrency holders. Cointracker co-founder Chandan Lodha said the refunds could signal that the tax agency is eager to show. That those who pay taxes on their crypto will not be punished. But the total number of refunds is not clear. A crypto holder would have been notified that he owed $ 3900 in taxes. And then he/she would have received a full refund after paying the amount.
The IRS warned crypto holders to comply
The IRS sent letters to 10,000 people to file tax returns on their cryptographic transactions. However, it was suspected that the IRS had obtained the details of the Coinbase individuals. In 2017, the IRS had filed a lawsuit against Coinbase. Also, the exchange was ordered to hand over the account information of over 13,000 cryptocurrency holders.
Many members of the crypto community viewed these letters as a warning from the IRS to get a complaint. The letters suggested that cryptogram holders should file amended returns if they did not report correct transactions in the past.
CPA’s Laura Walter is Crypto Tax Girl. However, she tweeted that the letter was a warning to everyone to comply as quickly as possible. Yet, the IRS still feels a bit indulgent. That was explicitly highlighting the passage. If crypto holders did not precisely declare your transactions in virtual currency in the past, you should file amended returns.”
"If you believe you didn't accurately report your virtual currency transactions, you should file amended returns"— Crypto Tax Girl (@CryptoTaxGirl) July 26, 2019
"If you do not accurately report your virtual currency transactions, you may be subject to future civil and criminal enforcement activity"
Confusion over application of the “like-kind” exemption
Suzanne Sinno and Christopher Wrobel are both lawyers at the IRS Deputy Chief Counsel’s Office. They also said the exemption of the same nature does not apply to cryptocurrency operations. A like-kind exemption is also an operation. That occurs between two similar properties and does not result in a capital gains tax.
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