While cryptocurrency transactions are becoming increasingly common in Marina Del Rey, California, persons in Marina Del Rey need to realize that cryptocurrency is subject to increased government regulation.
As one example of such increased government regulation, the U.S. Treasury Department, in its recently issued “The American Families Plan Tax Compliance Agenda” (“Treasury Department Tax Compliance Agenda”), stated, “Within the context of the new financial account reporting regime, cryptocurrencies and crypto as set exchange accounts and payment service accounts that accept cryptocurrencies would be covered. Further, as with cash transactions, businesses that receive crypto as sets with a fair market value of more than $10,000 would also be reported on”.
This statement in the Treasury Department Tax Compliance Agenda is consistent with increased government regulation of cryptocurrency in the tax area. The Internal Revenue Service (“IRS”) is becoming increasingly interested in investigating whether taxpayers are reporting the income from their cryptocurrency transactions (“crypto income”).
In “Operation Hidden Treasure”, the IRS has formed a group of fraud enforcement and criminal investigators to uncover cases of unreported crypto income.
TaxBit, the cryptocurrency tax service provider, has been retained by the IRS to aid the IRS in cryptocurrency tax audits, including tax audits involving cases of unreported crypto income.
The IRS is concerned with unreported crypto income. It would agree with the statement in the Treasury Department Tax Compliance Agenda that “cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion”.
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