No one wants to receive a notice in the mail that such person has been selected for a tax audit.
Unfortunately, people in San Diego, California who take part in cryptocurrency transactions face an increased risk that they will be subject to a tax audit (a “crypto tax audit”).
As there has been more activity in cryptocurrency transactions, the Internal Revenue Service (the “IRS”) has taken more interest in how these cryptocurrency transactions are being reported on tax returns by San Diego taxpayers.
On year 2020 Form 1040 tax returns, taxpayers need to respond to the question, “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
This question is one sign that the IRS is paying more attention to cryptocurrency.
In addition, in year 2020, the IRS sought to hire independent contractors who have expertise in cryptocurrency to help with crypto tax audits.
Moreover, earlier this year, the IRS announced the creation of “Operation Hidden Treasure”, specifically to investigate fraud and criminal violations from unreported cryptocurrency income.
The IRS will begin crypto tax audits in the San Diego area because it thinks that many taxpayers are not properly reporting their cryptocurrency transactions for tax purposes.
Cryptocurrency income is taxable income and must be reported for tax purposes.
If you purchase cryptocurrency as an investment for $100 and sell it for $200, you have cryptocurrency income (of $100).
If you do business or reside in San Diego and receive cryptocurrency for working on the blockchain ledger (a cryptocurrency “mining” transaction), you have cryptocurrency income.
If you do business or reside in San Diego and receive cryptocurrency from a company for its marketing or promotional purposes (a cryptocurrency “air drop” transaction), you have cryptocurrency income.
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Our experts will educate you in the mistakes made previously to help avoid getting into a similar mess in the future.
In addition, if you do business or reside in San Diego and receive payment for services or goods in cryptocurrency, you have cryptocurrency income. If received as payment for services, you have cryptocurrency income as compensation. If received as payment for goods, you have cryptocurrency income if the cryptocurrency exceeds your tax basis in the goods.
If you receive a notice in the mail that you are involved in a crypto tax audit in the San Diego area, you need to retain tax professionals who can successfully represent you in your crypto tax audit. You need the services of Leading Tax Group.
With Leading Tax Group, you will be represented by tax professionals who have both extensive knowledge of how cryptocurrency transactions work and substantial experience in helping other San Diego taxpayers deal with the IRS in their tax audits.
With this knowledge and experience, Leading Tax Group is the best choice to help you in your crypto tax audit in the San Diego area.
In San Diego, Leading Tax Group has an office at 11622 El Camino Real, 1st Floor.
If you receive a notice in the mail that you are the subject of a crypto tax audit, and live in the San Diego area, you need the aggressive and experienced tax representation of Leading Tax Group. Contact Leading Tax Group now!
read more Contact UsHeadquartered in Encino, California with multiple local branch offices in your backyard to serve you at your convenience. Leading Tax Group can schedule a face to face consultation to represent your case with the IRS, FTB, EDD, as well as CDTFA Audits.
Call our top-rated, experienced team today. We are experts in all San Diego laws relating to Bitcoin policy and can help you make the right decisions for yourself and your business.
No matter how far along you are in your journey toward capitalizing on Bitcoin, you need the proper representation to make sure you aren’t losing valuable dollars to the IRS.
Get in touch with our expert Bitcoin experts here in San Diego today and see how we can help you protect your assets and keep the IRS out of your business.
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