All posts

Latest Bitcoin News From the IRS

Shehan Chandrasekera, CPA

Dec 16, 2019 • 2 MIN READ

Last Updated: September 25, 2020

Starting in 2019, the Internal Revenue Service (IRS) showed that it was really paying attention to cryptocurrency. In August of this year, the IRS issued tax notices (Letter 6173, 6174 & 6174-A) for 10,000 US taxpayers. This was followed by the service issuing 43 Q&As elaborating on cryptocurrency guidance from the original Notice 2014-21 and Rev. Rul. 2019-24.

In December 2019, the IRS released its 2019 Annual Criminal Investigation Report, detailing actions taken by the Criminal Investigation (CI) Division of the IRS. The CI Division investigates potential criminal violations of the Internal Revenue Code and related financial crimes to encourage compliance with the law and confidence in the tax system. In fiscal year 2017, the IRS’s CI unit launched a special unit called the Nationally Coordinated Investigations Unit (NCIU). NCIU’s focus was to leverage cutting edge technology to combat tax crimes nationally.

According to the recently released criminal investigation report, cryptocurrency issues are a top priority for the CI’s Executive Steering Committee and NCIU (mentioned more than 25 times in the report). The report also mentions that the NCIU leads CI’s effort to develop criminal investigations from Coinbase John Doe summons data — the records of over 13,000 Coinbase users’ cryptocurrency transactions shared with the IRS. This data was one of the sources for the 10,000+ tax notices the IRS issued in August.

Recently, the IRS also expanded the summons beyond domestic cryptocurrency exchanges to Bitstamp — a Luxembourg-based crypto exchange. Additionally the IRS plans to add a question every American taxpayer whether they interacted with cryptocurrency at all in their 2019 tax return. These signs indicate that we can expect additional scrutiny on cryptocurrency tax compliance from the IRS in the coming year.

At CoinTracker, we take crypto compliance seriously. We always keep a close eye on the IRS and the latest cryptocurrency laws to constantly improve our platform and generate accurate cryptocurrency tax reports.

Tax laws are continuously changing, especially in the rapidly developing cryptocurrency space. To stay up to date on the latest, follow us @CoinTracker.

Disclaimer: this article is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.


Get our stories delivered

Subscribe to get tailored content on cryptocurrency taxes, portfolio tracking, news, and more.