Lately, a paper reminding taxpayers that income generated from cryptocurrency trading must be reported on income tax returns was officially issued by the United States Internal Revenue Service (IRS).
Taxpayers who do not report cryptocurrency earnings may be investigated or made accountable for “penalties and interest”.
Tax Obligation reminder for US Virtual investors
Alongside the fast coming US tax deadline of April 17, the United States Internal Service has sought to retell US natives generating profit from a venture such as virtual currency trading that they have an obligation to report and pay taxes as demanded.
In the most general interpretation of digital currency, the IRS explains that this particular currency is the virtual reflection of worth that plays the same role as that of a nation local currency. In addition, the US authority also sighted that due to trading in a digital currency it can be harder to detect and have an integrally pseudo-anonymous perspective, certain taxpayers may have the temptation to hide income that should be a tax form the Internal Revenue Authority.
Penalties may be subjected to perpetrators of Undisclosed Virtual Currency Earnings
The IRS details that earnings from digital currency transaction must be reported to them and thus resulting in tax returns. In addition to the above, they further explained that digital currency tradings must be a tax in accordance with the law similar to tradings in another property. In the event that, taxpayers do not accurately report income generated as a true form of cryptocurrency, they may be faced with an investigation of those trading transactions and in cases where suitable and ultimate blow of penalties and interest may be given by the US Regulator.
In the most complex occurrence, taxpayers might be alleged in relationship to criminal prosecution, due to the reason of the failure to correctly file income tax in the form of digital currency trading, according to a statement issued by the US authority. The statement also included that the above criminal accusations may consist of filing an artificial (fake) tax return and/or tax evasion.
In addition to the above, the state agency also emphasized that if an individual is found guilty of tax evasion, then that individual is laid open to a maximum prison sentence of up to five years and a maximum fine charge of up to USD 250,000. The statement continues stating that for any individual guilty of filing a fake return is exposed to a maximum prison sentence of three years and a maximum fine of USD 250,000.
In conclusion, in the US, cryptocurrency is exposed to information to the same degree “as any other payment made in property” the IRS noted as reported by NewsBitcoin.com