Internal Revenue Service Starts Auditing Taxpayers With Cryptocurrenciesbr>
The United States Internal Revenue Service (IRS) is reportedly beginning to audit taxpayers who own cryptocurrencies.
An agency official told Bloomberg that the IRS has identified a number of US citizens who have failed to report their income from crypto transactions or underreported such income, adding that the agency is preparing to send out notices to taxpayers that have been identified.
“In our exam operations, we’re starting to work those cases,” said Mary Beth Murphy, commissioner of the IRS Small Business/Self-Employed Division. “The IRS has identified a number of cryptocurrency tax cases using its document matching program — a tool that helps detect taxpayers who underreport or fail to report their income.”
Murphy said that the division is working with the agency’s Large Business and International (LB&I) Division in determining how to proceed in crypto-related audits because more of those cases are cropping up. She also revealed that the new tax reform on crypto transactions will be released soon.
In May of this year, IRS Commissioner Charles P. Rettig said that that the agency “made it a priority” to issue relevant guidance on crypto taxation, acknowledging that there are “areas where needed and helpful additional guidance can be provided.”