January 28, 2021

Cryptheory

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Crypto tax regulation: IRS working to make it clearer

2 min read

TL;DR Breakdown

  • Internal Revenue Service is looking to clarify all crypto tax regulations
  • FinCEN alters FBAR rule to allow for declaration of Bitcoin

While crypto regulations in the United States are not so clear, the Internal Revenue Service (IRS) appears bent on clarifying all policies concerning crypto tax.

The IRS, in the second draft of the form 1040 published online, has clarified that all individuals who might have had any transaction related to the crypto industry are going to be mandated to declare such transactions. This is in line with the authorities attempt at giving crypto tax defaulters no leeway in form of any defense they might want to put up for any tax infractions.

Cryptopolitan has earlier reported how a former investigator with the IRS, Don Fort, declared that the agency was going to be penalizing holders of cryptocurrency who failed to declare their holdings.

Fort added that the tax collector view was shifting from educating the public into how to enforce the collection of such crypto tax. He also highlighted how the IRS has been contacting crypto exchanges on how they can gather information on their US users while citing examples of Bitstamp and Coinbase.

FinCEN to alter FBAR disclosure for new crypto tax regulations

The Financial Crimes Enforcement Network (FinCEN) has recently announced that its previous stance on Form 114, Report of Foreign Bank and Financial Accounts, commonly known as FBAR, is changing. This was made known by a report on Forbes.

In previous times, digital currencies were not required to be reported to the authorities, however, in what appears to be a change of heart, the financial regulator has now said that it would be altering the FBAR laws to allow for the disclosure of digital assets like Bitcoin.

US authorities usually require a FBAR for individuals who hold financial interests outside the country that exceeds $10,000 at any point during a year. Failure to report such interests could result in stiff penalties for violators.





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