The US Internal Revenue Service (IRS) is preparing a different method to ensure you settle your tax debts.
As per Robert Wearing, IRS Deputy Associate Chief Counsel for Procedure and Administration; the US government deemed digital property as property; possibly confiscated from taxpayers to settle their debts.
Wearing was addressing during a virtual conference hosted by the American Bar Association, as announced by Bloomberg Law. Wearing informed the conference’s participants that,
“Bottom line: The IRS will seize that property and will attempt to follow its usual procedures to sell it and use it to satisfy collection.”
In a notification issued in 2014, the US agency gave its position on cryptocurrencies. It stated that the “character of the gain or loss generally depends on whether the virtual currency is a capital asset in the hands of the taxpayer.”
Indicating that it viewed such digital currencies as property for taxes, the agency stated,
“A taxpayer generally realizes capital gain or loss on the sale or exchange of virtual currency that is a capital asset in the hands of the taxpayer.”
The IRS has enhanced its efforts to acquire data on crypto transactions by taxpayers, ensuring settling debts simpler. A branch of the California District Court allowed the agency authority to issue a John Doe summons on the crypto exchange giant Kraken; expediting the IRS’ bid to determine the identities of US residents and citizens who have carried high-value crypto transactions in the past four years.
IRS Outsourcing data mining
The IRS lately chose US tax automation software developer TaxBit; this is to furnish the agency with data analysis and tax calculation assistance for folks with cryptocurrency.
Austin Woodward, Co-Founder, and CEO of TaxBit, stated that,
“This is a milestone moment for the cryptocurrency industry. It indicates regulators are embracing the asset class; but doing so in a way that ensures a straightforward approach to conform with existing regulations. We believe this is an important step for the enablement of widespread cryptocurrency adoption.”
Tax agencies are also working globally. Lately, in Seoul, South Korea, the capital’s tax authority initiated a bust on crypto-tax evaders, seizing crypto-assets from at least 1,566 individuals and 676 firms in the uppermost tax band.
Most of them appealing to the authorities not to sell their tokens. This is amid fear of missing out on more significant gains. Seoul announced it seized some USD 22m worth of crypto; hoping to collect crypto from almost 900 other debtors.
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