The US Internal Revenue Service (IRS) is hosting a summit to discuss the tax implications of crypto early this March. However, meaningful clarification on the treatment of bitcoin is not expected as the agency continues to leave unanswered tax issues surrounding the asset.
In an attempt to crack down on tax evasion in the crypto sector, the United States ‘ main revenue service is looking to meet industry leaders. The IRS is set to hold a meeting at its headquarters in Washington, DC, where important topics will be discussed about taxing the crypto industry.
The agency has invited several cryptocurrency companies and supporters to participate in the summit and discuss how the agency can “balance taxpayer service with regulatory enforcement”.
The Summit will discuss a number of topics, including regulatory guidance and compliance, the preparation of tax returns, cryptocurrency exchange issues, and technology updates. Each panel will last 90 minutes, and will feature government and private sector speakers.
Kristin Smith, executive director of the advocacy group for the Blockchain Association, said the summit has been in the making for at least a month, with the IRS reaching out to industry leaders at the start of the year. She said the conference could be used as an opportunity for the IRS to know more about the environment, to better regulate it.
The IRS has expanded its monitoring of crypto-currency consumers over the 2019 tax year, as it started sending mass mailed targeted letters to those accused of “misreporting” cryptocurrency transactions beginning June of last year.
These notifications serve to “warn taxpayers” that they plan to start working on a particular area of non-compliance.
Other taxpayers confirmed use of the cryptocurrency in complete audits. Such audits can allow recipients to list all the blockchain addresses they control, report all transactions related to such accounts – and even hardfork, faucet, and tipping earnings.
As more people start using bitcoin for its privacy-protecting properties, the IRS is likely to respond with new approaches to transaction detection and tracking. Anyone caught evading cryptocurrency taxes will face steep penalties.