• Latest
New IRS Warning Letters Target Crypto Investors Who Misreported Trades

New IRS Warning Letters Target Crypto Investors Who Misreported Trades

August 14, 2019
ygg sea surpasses 10,000 scholarships in just six months of launch

YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch

May 6, 2022
mintable launches industry changing gas free minting service on ethereum

Mintable Launches Industry Changing Gas Free Minting Service on Ethereum

May 1, 2022
5 projects enabling smart contract development on bitcoin

5 Projects Enabling Smart Contract Development on Bitcoin

April 29, 2022
bitcoin atm installed in mexico's senate building

Bitcoin ATM installed in Mexico’s Senate Building

April 27, 2022
cross chain services play a crucial role in facilitating continued adoption of defi applications

Cross-Chain Services Play a Crucial Role in Facilitating Continued Adoption of DeFi Applications

April 26, 2022
justin sun launches usdd, integrating the blockchain world and the real world with the decentralized stablecoin

Justin Sun Launches USDD, Integrating the Blockchain World and the Real World with the Decentralized Stablecoin

April 25, 2022
nfts: the next musical revolution

NFTs: The Next Musical Revolution

April 24, 2022
things you should know before investing in nfts

Things You Should Know Before Investing in NFTs

April 24, 2022
what are wrapped tokens?

What Are Wrapped Tokens?

April 23, 2022
what is the future of ethereum (eth)?

What is the future of Ethereum (ETH)?

April 22, 2022
green gaming

Everything You Need to Know About Play-to-Earn on Algorand in 2022

April 21, 2022
$ape going bananas as rumors of upcoming land sale of bayc metaverse gather momentum

$APE Going Bananas As Rumors of Upcoming Land Sale of BAYC Metaverse Gather Momentum

April 21, 2022
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
CoinNewsDaily
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
No Result
View All Result
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
No Result
View All Result
CoinNewsDaily
No Result
View All Result
Home Business

New IRS Warning Letters Target Crypto Investors Who Misreported Trades

coinnewsdaily by coinnewsdaily
August 14, 2019
in Business
0
New IRS Warning Letters Target Crypto Investors Who Misreported Trades
190
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

Related articles

ygg sea surpasses 10,000 scholarships in just six months of launch

YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch

May 6, 2022
5 projects enabling smart contract development on bitcoin

5 Projects Enabling Smart Contract Development on Bitcoin

April 29, 2022

The U.S. Internal Revenue Service (IRS) is sending another round of warning letters to cryptocurrency users, this time to taxpayers it believes to have misreported income from exchange transactions.

In addition to the three letters sent last month to crypto traders advising them they may have incorrectly filed their taxes, the IRS is now also telling certain investors that they did, in fact, report the wrong amount of income from crypto transactions. And the agency is looking to collect.

According to one letter shared with CoinDesk, a taxpayer owed nearly $4,000 for the 2017 tax year. This taxpayer owed more than $3,600 in taxes alone, with another $200 or so in interest accrued.

The letter was dated July 29, 2019.

Chandan Lodha, co-founder of tax software provider CoinTracker, told CoinDesk that the IRS has been sending these so-called CP2000 notices to some customers, indicating they are potentially on the hook for revenue they did not report.

“The IRS is sending out these other notices and those are kind of like warning letters of varying degrees of how threatened they were,” Lodha said of the earlier three letters. But the “CP2000 is a slightly different letter.”

He went on:

“Basically what it says is ‘hey we have a report from one of the financial institutions you use and the amount they reported to us the IRS is different than the amount you, the taxpayer, reported and this is the amount you owe’ and it’s a 30-day letter meaning you have to respond in 30 days.”

The CP2000 letter has been used outside of the cryptocurrency space for other forms of unreported income, Lodha said. However, “it’s definitely a new phenomenon that’s starting” in the crypto space.

Lodha added that transfers from an exchange into another wallet shouldn’t be a taxable event, but an exchange may still report it as such.

Paper chase

Justin Woodward, a co-founder and attorney with tax calculator startup TaxBit, told CoinDesk that he’s seen more of these letters starting in August.

According to the IRS website, a recipient of the letter should respond regardless of whether they agree with the tax assessment or not. Those who disagree with the assessment should ask their financial institution to send a corrected statement.

Lodha added:

“In terms of how the actual dynamic works, first they send you the CP2000, they send the proposed amount due and you say ‘yes, I’ll pay that’ or ‘no, and here’s the supporting documentation.’”

According to the letter shared with CoinDesk, the recipient reported $0 in income from crypto transactions to the IRS in the 2017 tax year. However, information through Coinbase indicated the recipient should have reported more than $12,000 in income.

Neither the IRS nor Coinbase immediately responded to requests for comment Wednesday.

It is possible that such discrepancies come from how exchanges are reporting transactions.

Woodward said this likely comes from the exchanges issuing 1099-K forms, rather than 1099-B forms. Because 1099-K forms are typically used to report income for merchants, most transactions would be reported as revenue, rather than any losses that may have occurred.

“People that have received a 1099-K from an exchange but have not filed an IRS 8949 in the 2017 tax year are the ones that we’re seeing received the most letters and who this is typically applying to right now,” he said.

In such cases, “we’ve been sending letters back that outline the deficiencies in 1099-Ks … and we’ve helped [traders] and with the proper 8949,” Woodward said.

He described how filing the merchant form could lead to a trader receiving the CP2000, saying:

“The amounts on the form, what they’re doing is if I make a trade for $100,000 on a platform, I buy 1 bitcoin for $100,000 and I sell it a couple weeks later for $90,000 I could have a $10,000 loss but I have a 1099-K that says I received $90,000.”

The IRS is expected to issue new guidance on crypto taxes in the near future, updating the last official guidance issued in 2014. It is unclear what the agency might say, though outstanding questions include how to deal with hard forks and airdrops.

Miniatures image via Shutterstock

Credit: Source link

Tags: BusinessCryptoCrypto Business
Share76Tweet48
Previous Post

Nevada Cryptocurrency Kiosks Now Require Money Transmission Licenses

Next Post

Iran Crypto Devs Launch Platform for Flood Victims in Light of US Sanctions

coinnewsdaily

coinnewsdaily

CoinNewsDaily.com is an online Crypto Coin News Website that aims to provide latest trendy news from market and around the world.

Related Posts

ygg sea surpasses 10,000 scholarships in just six months of launch
Alt Coin

YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch

May 6, 2022
5 projects enabling smart contract development on bitcoin
Alt Coin

5 Projects Enabling Smart Contract Development on Bitcoin

April 29, 2022
cross chain services play a crucial role in facilitating continued adoption of defi applications
Alt Coin

Cross-Chain Services Play a Crucial Role in Facilitating Continued Adoption of DeFi Applications

April 26, 2022
justin sun launches usdd, integrating the blockchain world and the real world with the decentralized stablecoin
Alt Coin

Justin Sun Launches USDD, Integrating the Blockchain World and the Real World with the Decentralized Stablecoin

April 25, 2022
what are wrapped tokens?
Bitcoin

What Are Wrapped Tokens?

April 23, 2022
what is the future of ethereum (eth)?
Alt Coin

What is the future of Ethereum (ETH)?

April 22, 2022
Load More
Next Post
Iran Crypto Devs Launch Platform for Flood Victims in Light of US Sanctions

Iran Crypto Devs Launch Platform for Flood Victims in Light of US Sanctions

Categories

  • Alt Coin
  • Bitcoin
  • Business
  • Ethereum
  • ICO
  • Litecoin
  • Mining
  • NFT
  • Ripple
  • Tech
  • Trading

What New here?

  • YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch
  • Mintable Launches Industry Changing Gas Free Minting Service on Ethereum
  • 5 Projects Enabling Smart Contract Development on Bitcoin

Subscribe to Get More!

Loading
  • About Us
  • Contact Us
  • Privacy & Policy

© 2018-2021 CoinNewsDaily.com by CoinNewsDaily Inc. Crafted with Love by iFtiDev

No Result
View All Result
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining

© 2018-2021 CoinNewsDaily.com by CoinNewsDaily Inc. Crafted with Love by iFtiDev

  • bitcoinBitcoin(BTC)$19,104.87-4.94%
  • ethereumEthereum(ETH)$1,023.97-9.34%
  • tetherTether(USDT)$1.000.08%
  • binancecoinBNB(BNB)$208.09-5.58%
  • rippleXRP(XRP)$0.309779-6.42%
  • cardanoCardano(ADA)$0.442043-6.52%
  • SolanaSolana(SOL)$31.64-10.15%
  • dogecoinDogecoin(DOGE)$0.063114-3.73%
  • polkadotPolkadot(DOT)$6.74-6.64%
  • daiDai(DAI)$1.000.00%
  • tronTRON(TRX)$0.063609-3.34%
  • Shiba InuShiba Inu(SHIB)$0.000010-1.04%
  • leo-tokenLEO Token(LEO)$5.933.19%
  • litecoinLitecoin(LTC)$50.64-3.24%
  • matic-networkPolygon(MATIC)$0.436842-17.37%
  • FTXFTX(FTT)$23.52-7.29%
  • OKBOKB(OKB)$11.71-1.79%
  • CronosCronos(CRO)$0.110780-5.81%
  • chainlinkChainlink(LINK)$5.97-6.41%
  • stellarStellar(XLM)$0.103875-7.12%
  • cosmosCosmos Hub(ATOM)$7.07-1.31%
  • moneroMonero(XMR)$109.40-8.87%
  • algorandAlgorand(ALGO)$0.288311-6.30%
  • ethereum-classicEthereum Classic(ETC)$14.36-5.75%
  • bitcoin-cashBitcoin Cash(BCH)$99.93-3.71%
  • vechainVeChain(VET)$0.021644-6.07%
  • tezosTezos(XTZ)$1.38-7.91%
  • Internet ComputerInternet Computer(ICP)$5.10-6.54%
  • filecoinFilecoin(FIL)$5.16-6.11%
  • theta-tokenTheta Network(THETA)$1.13-9.83%
  • ElrondElrond(EGLD)$46.87-7.98%
  • bitcoin-cash-svBitcoin SV(BSV)$53.07-6.65%
  • eosEOS(EOS)$0.89-5.47%
  • paxos-standardPax Dollar(USDP)$1.000.03%
  • makerMaker(MKR)$849.42-11.34%
  • AaveAave(AAVE)$54.38-10.44%
  • huobi-tokenHuobi(HT)$4.80-5.42%
  • iotaIOTA(MIOTA)$0.255426-6.13%
  • zcashZcash(ZEC)$52.60-10.95%
  • neoNEO(NEO)$8.07-7.42%
  • basic-attention-tokenBasic Attention(BAT)$0.362442-2.76%
  • zilliqaZilliqa(ZIL)$0.036569-7.70%
  • wavesWaves(WAVES)$4.92-6.54%
  • havvenSynthetix Network(SNX)$2.15-18.22%
  • dashDash(DASH)$41.49-9.15%
  • KusamaKusama(KSM)$45.50-7.74%
  • PancakeSwapPancakeSwap(CAKE)$2.88-6.38%
  • Elrond ERDElrond ERD(ERD)$0.0259290.00%
  • nemNEM(XEM)$0.036731-6.95%
  • ethlendAave [OLD](LEND)$4.103.48%
  • CompoundCompound(COMP)$44.44-7.33%
  • qtumQtum(QTUM)$2.66-7.37%
  • bitcoin-goldBitcoin Gold(BTG)$14.97-6.46%
  • omisegoOMG Network(OMG)$1.73-6.92%
  • golemGolem(GLM)$0.2363981.79%
  • ontologyOntology(ONT)$0.215039-7.66%
  • SushiSushi(SUSHI)$0.97-10.30%
  • yearn-financeyearn.finance(YFI)$5,136.90-10.20%
  • umaUMA(UMA)$2.34-8.20%
  • digibyteDigiByte(DGB)$0.008811-4.03%
  • UniswapUniswap(UNI)$2.4438.80%
Posting....