Whether you’re a member of the professional tax community, an avid Bitcoin miner, or simply someone who enjoys following business and finance news, you’ve likely noticed a whirlwind of cryptocurrency-related tax developments during the past several years. Thanks in part to volatile spikes and decreases in value – and amid them, a series of court cases and congressional hearings – cryptocurrency has attracted attention from the Internal Revenue Service (IRS). As the Service continually works to develop clearer tax rules for reporting Bitcoin (and other cryptocurrencies), it is also placing higher priority on the enforcement of these rules – a shift evidenced by recent enforcement initiatives like the Nationally Coordinated Investigations Unit (NCIU) and International Tax Enforcement Group (ITEG). In a more recent development, the IRS announced the creation of a new transnational cryptocurrency taskforce, reminding U.S. citizens around the globe that hiding and not reporting taxable activity involving Bitcoin is an increasingly dangerous gamble.
In July 2018, the IRS website published a brief announcement detailing the creation of a multinational organization called the “Joint Chiefs of Global Tax Enforcement.” The Tax Enforcement taskforce is also known as the “J5,” a reference to its five member nations:
As stated in the announcement, the J5’s mission is to fight “transnational tax crime and money laundering through increased enforcement collaboration” focused around the use of cryptocurrency. As the IRS cautioned, “We will work together to gather information, share intelligence, conduct operations and build the capacity of tax crime enforcement officials.”
Specifically, the IRS highlighted at least two of the J5’s major objectives:
This announcement should come as little surprise to anyone who has been following developments in the cryptocurrency industry. If you’re out of the loop and need to get caught up, our Bitcoin tax attorneys would encourage you to explore the following articles, presented chronologically to highlight several milestones on the Bitcoin tax timeline over the past few years.
For further information, the additional references may provide a useful starting point:
Bitcoin does not provide the anonymity many taxpayers assume it does – and, as the IRS ramps up its enforcement efforts by collaborating with other nations, it is becoming less and less possible to conceal one’s identity or transactions. If you have mined, sold, traded, exchanged, purchased, or made transactions using Bitcoin or other cryptocurrencies at any point during the past several years, it is in your best interests to review your tax and FBAR disclosure responsibilities with a Bitcoin tax lawyer. For a reduced-rate Bitcoin tax consultation with an experienced tax attorney, contact the Tax Law Office of David W. Klasing online, or call today at (800) 681-1295.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland and Sacramento.
Helpful Cryptocurrency Q and A Library: https://klasing-associates.com/topics/bitcoin/
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