The U.S. Internal Revenue Service (IRS) announced Friday that it has begun sending letters to taxpayers who own cryptocurrency, advising them to pay any back taxes they may owe or to file amended tax returns regarding their holdings.
In a news bulletin, the agency said that it began mailing what it called “educational letters” last week. According to the statement, there are three variations of the letter that were sent.
The IRS further said that it will have sent such letters to “more than 10,000 taxpayers” by the end of this month,” adding that “the names of these taxpayers were obtained through various ongoing IRS compliance efforts.”
“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties,” IRS Commissioner Chuck Rettig said in a statement. “The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”
In May, it was reported that the IRS is beginning to work on new guidance regarding cryptocurrencies, its first such effort since 2014. A number of organizations and industry advocates have called on the agency in past years to update its guidance following its decision to treat cryptocurrencies as a form of intangible property for tax purposes.
On Thursday, a user of the r/bitcoin subreddit described receiving such a letter. Lawyer Tyson Cross, writing for Forbes, also detailed how a number of his crypto-focused clients have received this kind of letter from the IRS.
Image Credit: Mark Van Scyoc / Shutterstock
Let’s block ads! (Why?)