Published:
23/06/2019 11:45
ET. Journalist:
By CCN Markets: The bitcoin price rocketed past $10,000 for the first time since 2018, and crypto fans are celebrating. But they’re not the only ones noticing the budding cryptocurrency bull market.
The U.S. Department of Justice is ramping up criminal prosecutions of bitcoin tax evaders. In this effort, the DOJ is joining a mass crackdown by the IRS to launch enforcement actions against crypto tax crimes.
Bitcoiners In Crosshairs of Both the DOJ and IRS
In other words, bitcoin investors are now in the cross hairs of not one — but two — mammoth government agencies that each want a share of crypto-related capital gains.
Bitcoin investors are now on the radars of both the Department of Justice and the IRS. | Source: Pixabay
DOJ Tax Czar: ‘No Free Pass’ for Crypto Investors
Richard Zuckerman is the principal deputy assistant attorney general with the DOJ’s Tax Division. He says said his team is hunting down bitcoin tax evaders as a warning to the general public that crypto-related tax crimes won’t go unnoticed or unpunished.
Zuckerman issued the warning June 21 at the New York University Tax Controversy Forum.
“It’s important for deterrence for the public to know that the IRS and the Department of Justice focus in all of the economic strata. The perception that if you’re in one particular economic strata, you get a free pass [is wrong].”
The DOJ’s Tax Division is already in the midst of criminally prosecuting several cryptocurrency cases, and warned that others are coming. Zuckerman says the Justice Department and the Internal Revenue Service are working hand-in-hand to bring bitcoin tax evaders to justice.
IRS Commissioner Chuck Rettig reaffirmed the statements of the Justice Department’s Richard Zuckerman. Rettig says the IRS is prioritizing criminal enforcement of cryptocurrency crimes. To this end, the agency is hiring new staffers to expand its enforcement efforts.
IRS Agent Fired Warning Shots Last Week
These new declarations by the DOJ and the IRS confirm CCN’s recent report. Last week, IRS tax investigator Gary Alford predicted that the agency would ratchet up criminal prosecutions of bitcoin users who don’t pay taxes.
Alford noted that it’s easier now for a prosecutor to persuade a jury to convict a bitcoin tax evader because the public is now more familiar with crypto. He says it would have been harder to prosecute such a case before because the public had not heard of bitcoin until recently.
“We’re usually behind the curve. But in this case, we are ahead of the curve. We didn’t know [before] if we were at the point where we can bring it for criminal prosecution. We are at that point now.”
Gary Alford rose to fame in 2013 for bringing down the Silk Road drug trafficking site, which resulted in the arrest of Ross Ulbricht. So he’s no one to be trifled with.
Which Crypto Transactions Are Taxed?
As CCN reported, not every crypto transaction is taxed. However, you are required to report cryptocurrency as income if you did the following:
- Sold bitcoin (or any other crypto).
- Converted bitcoin to fiat currency.
- Used cryptocurrencies to pay for goods or services.
- Received free crypto through a fork or an airdrop.
Your transactions are not taxed if you:
- Bought bitcoin but never sold it.
- Gave crypto as a gift to a friend or family member, and the gift was less than $15,000.
- Purchased crypto with a Self-Directed IRA or Solo 401(k).
This post was last modified on (Eastern Time): 23/06/2019 13:03
