The United States Internal Revenue Service classifies crypto as property, meaning you can trigger taxes every time you use crypto to buy something. You might be using it to pay for a Tesla electric vehicle — oh, sorry, that’s not possible anymore — a cup of coffee or even a castle in Europe. You might be paying someone for services, either as an independent contractor or as an employee. But no matter what the transaction, you may have a gain or a loss, something quite apart from the income tax impact on the person you are paying. Not so simple …

Internal Revenue Service chief Charles Rettig called out lawmakers for not taking the initiative on addressing the problem of many U.S. residents not paying taxes on crypto. In a Tuesday senate hearing on the IRS’ fiscal year 2022 budget, Rettig said that the agency would likely require a "clear dictate from Congress" to regulate crypto. The IRS has listed $32 million in its budget for “crypto-related enforcement operations” as well as $41 million related to cybercrime in its attempts to address the issue of non-reporting or underreporting taxpayers. "The authority for us to collect that information is critical," said Rettig. …

A couple investing in crypto have claimed that coins gained by mining or staking are untaxable until sold, in a complaint filed to federal court. The Tennessee couple is seeking a refund from the United States Internal Revenue Service and filed a complaint with the U.S. District Court for the Middle District of Tennessee on Tuesday. Joshua and Jessica Jarrett claim that earnings from staking are not taxable transactions because they constitute the creation of property. They compared this to a baker making a cake or an author writing a novel. Law360 reported that the court heard Joshua Jarrett used …

Minnesota Rep. Tom Emmer has reintroduced a bill aimed at preventing the IRS from imposing penalties or fees on crypto taxpayers with forked assets. In an announcement from Emmer on Monday, the congressperson from Minnesota said he had once again introduced the Safe Harbor for Taxpayers with Forked Assets bill in the United States House of Representatives. If passed in its current state, the bill would create a safe harbor for crypto holders with forked assets, allowing them to be nontaxable events. Further, these conditions would be continued until the Internal Revenue Service provides “clear and consistent guidance on how …

Within the last hour, Bitcoin's (BTC) price dropped by more than 3%, extending the decline that started on May 12 and saw the digital asset drop as low as $46,000 on some exchanges. Initially, it was Tesla’s May 12 announcement that it would stop accepting Bitcoin as payment over environmental concerns, along with technical weakness and a nearly complete head-and-shoulders technical pattern, that pushed BTC's price down to $46,000. May 13’s bearish catalyst appears to be a Bloomberg Tax report claiming that the United States Justice Department and the Internal Revenue Service are investigating Binance Holdings Ltd. for alleged “illicit …

Major cryptocurrency exchange Binance is reportedly under investigation by both the United States Department of Justice and Internal Revenue Service in an apparent effort to stymie illegal trading activity from users in the United States. According to a Bloomberg report, the two government agencies are looking into Binance Holdings Ltd as part of an investigation into U.S. residents using cryptocurrencies for illegal transactions. Officials are reportedly seeking information from Binance employees and customers, but not all their inquiries are necessarily tied to allegations of wrongdoing. The report said the information came from unnamed sources who requested anonymity due to the …

The United States Internal Revenue Agency is prepared to seize the holdings of cryptocurrency owners who are struggling to pay their unpaid tax debts, sending a strong signal that the agency is treating digital assets the same as any other type of property that can be confiscated. Robert Wearing, deputy associate chief counsel for the IRS, told a virtual conference held by the American Bar Association that the government classifies digital assets as property. As such, these assets may be confiscated to satisfy outstanding tax debt that hasn’t been repaid. “The IRS will seize that property and will attempt to …

Kraken has been ordered to provide information on its users who conducted the equivalent of $20,000 in crypto transactions in any one year, between 2016 and 2020, to the United States Internal Revenue Service. A federal court in northern California authorized the IRS to serve a “John Doe summons” on Kraken Wednesday. The exchange is not alleged to have done anything wrong. The IRS is after the records of an “ascertainable group or class of persons” who may have failed to comply with tax reporting and internal revenue laws. In addition, the IRS will check if Kraken has been compliant …

Seems like we now all have stories starting with, “What I did during the pandemic...” Most begin with cleaning out the closet and, hey, guess what? That’s where my story starts, but I bet you can’t guess where it ends! Let’s start with what I found in that closet: family photos before the days of digital. I know — memories of boring trips with the kids and people who I either owe money to or who don’t talk to me anymore! And all of these are nicely arranged in photo albums. You know, photo albums. Big, bulky books with strange …

The United States Internal Revenue Service has been hunting crypto vigorously for more than five years now, and the pace is getting faster. A couple of decades ago, the IRS was after offshore accounts, and that effort was among the most successful in the IRS’ history. Now, it’s crypto the IRS is after, and there’s no suggestion that the IRS intends to fail. The IRS wants crypto tax data in a big way, from asking about crypto on each tax return to its latest Hidden Treasure initiative and more. The collective efforts of the IRS are impressive, and it is …

The United States Department of Treasury is again sharpening its sword upon crypto. In January 2021, the Department of Treasury’s Financial Crimes Enforcement Network issued Notice 2020-2. The Notice states that FinCEN intends to amend its regulations concerning the reporting of foreign financial accounts to include digital currency as a type of reportable account. In simple terms, this means FinCEN may soon require crypto users to file annual Reports of Foreign Bank and Financial Accounts, or FBARs, for crypto held on foreign exchanges. The effects of such an amendment are expansive. A mere paragraph long, the notice carries several implications …

A U.S. federal court has granted authorization to the Internal Revenue Service, or IRS, to serve a John Doe summons to fintech firm Circle seeking all information on U.S. taxpayers who traded at least $20,000 worth of crypto assets on its platforms between 2016 and 2020. The summons will apply to Circle Internet Financial Inc. including all “predecessors, subsidiaries, divisions, and affiliates, including Poloniex LLC.” According to the Department of Justice’s announcement, Judge Richard Stearns concluded there is “reasonable basis for believing that cryptocurrency users may have failed to comply with federal tax laws.” The document also notes the IRS …