There are many lessons to be learned about cryptocurrency by people in Century City, California who engage in cryptocurrency transactions. It may be surprising that one such lesson comes from legendary gangster Al Capone.
While Capone committed numerous crimes, he ultimately went to jail for tax evasion. The lesson from Capone is that if you engage in cryptocurrency transactions, but fail to report the income from these cryptocurrency transactions (“crypto income”), you can go to jail.
Criminal punishment is only one of the negative consequences that can adversely affect you if you have unreported crypto income.
Persons in Century City with unreported crypto income also can be subject to action by the Internal Revenue Service (“IRS”), such as tax audits, wage garnishments, bank levies, and asset forfeitures and seizures, and have to pay additional interest liability and additional penalty liability.
The issue of unreported crypto income arises because crypto income is taxable income and must be reported on your tax return.
If you purchase cryptocurrency for $100 and sell it for $200, you have $100 of crypto income and taxable income.
Cryptocurrency that is received in payment for goods or services can result in crypto income and taxable income. If received for goods, the cryptocurrency is crypto income and taxable income when it is more than the tax basis in the goods; if received for services, the cryptocurrency is fully crypto income and taxable income as compensation.
In addition, cryptocurrency that is received from a company for its marketing or promotional purposes in an “airdrop” transaction, or that is received for working on the “blockchain ledger” in a “mining” transaction, is crypto income and taxable income.
It is also important to note that the IRS is paying more attention to unreported crypto income.
The IRS has created a dedicated unit of IRS criminal investigation and fraud enforcement workers, called “Operation Hidden Treasure”, to review cases of unreported crypto income.
The IRS also has hired TaxBit, the cryptocurrency tax service provider, to assist with cryptocurrency tax audits, including unreported crypto income tax audits.
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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.
Taxpayers also must reveal certain cryptocurrency activity on their Form 1040 tax returns for year 2020 by answering the question, “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”.
If you have unreported crypto income in Century City and want to not follow the example of Al Capone, you need representation from qualified tax professionals who can help you reach a positive outcome in your unreported crypto income case. You need representation by Leading Tax Group.
Leading Tax Group has wide experience in representing Century City taxpayers in other unreported income cases. Leading Tax Group also has a broad understanding of the many issues relevant in cryptocurrency transactions. With this experience and understanding, Leading Tax Group will provide persons in the Century City area with successful representation in their unreported crypto income cases.
In Century City, Leading Tax Group maintains an office at 1801 Century Park East, 24th and 25th Floors.
If you want to avoid the fate of Al Capone in your unreported crypto income situation, and live in the Century City 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.
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