U.S. IRS or the Internal Revenue Service started sending warning letters to cryptocurrency users urging them to start paying their crypto taxes as we previously read in the latest cryptocurrency news.
The U.S. IRS agency already sent three warning letters last month to multiple crypto traders advising them that they haven’t filed or have incorrectly filed their taxes. The agency is also telling some investors that they did report the wrong amount of income from the crypto transactions and they are now even willing to collect. According to one letter that was shared in the news with a taxpayer, he reportedly owed more than $4,000 in 2017 in taxes alone with another $200 in interest. The letter was sent out on July 29th, 2019. The co-founder of the tax software provider CoinTracker Chandan Lodha even stated that the IRS has started sending these CP2000 notices to many customers indicating that they are now hooked for revenue that it wasn’t reported. He stated:
“The IRS is sending out these other notices and those are kind of like warning letters of varying degrees of how threatened they were. But the “CP2000 is a slightly different letter. Basically what it says is ‘hey we have a report from one of the financial institutions you use and the amount they reported to us the IRS is different than the amount you, the taxpayer, reported and this is the amount you owe’ and it’s a 30-day letter meaning you have to respond in 30 days.”
The co-founder and attorney of the tax calculator startup TaxBit Justin Woodward even noted that he has seen more of these letters starting to be sent out in August. According to the IRS website, a recipient of the letter should respond whether they agree with the tax assessment or not. Lodha added as we read in the previous altcoin news:
“In terms of how the actual dynamic works, first they send you the CP2000, they send the proposed amount due and you say ‘yes, I’ll pay that’ or ‘no, and here’s the supporting documentation. I’m not sure if it’s a lack of understanding from the IRS or if they’re just blindly sending out these letters hoping people are too scared [or] too lazy to look at the letter and say ‘hey they made $13,000’ when they didn’t make $13,000.’’
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