Virtual Currency Creates Very Real Responsibilities

The Internal Revenue Service (IRS) has been sending out letters to many Taxpayers informing them of errors that may have been made in previous Tax Returns. The root cause of these errors has to do with cryptocurrency or virtual currency. By the end of the month, over 10,000 letters will have been sent out.

          This is part of an active compliance campaign being conducted by the IRS. As the popularity of virtual currency increases, many do not realize that it is taxed as property from the Federal level. The purpose of sending these letters and having an education campaign is to help affected Taxpayers understand their obligations and know how to fix past mistakes. This also sends a clear message that the IRS will be fully enforcing the tax law in this area. Non-compliance regarding virtual currency is a growing focus within IRS Criminal Investigation. Now is the time to understand how these currencies can truly impact your bottom line.

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