As Crypto Prices Rise, So Too Does Government Interest in Bitcoin Tax Evasion

Despite the massive losses after the all-time highs that Bitcoin experienced, the popular digital asset has managed to climb its way back up to almost $13,000 (at the time of writing), reigniting interest and excitement from investors and enthusiasts alike.

Date: 
June 26, 2019
Read time: 
2 minutes

As Crypto Prices Rise, So Too Does Government Interest in Bitcoin Tax Evasion

Author: Dylan B
Date: 
June 26, 2019
Read time: 
2 minutes

Despite the massive losses after the all-time highs that Bitcoin experienced, the popular digital asset has managed to climb its way back up to almost $13,000 (at the time of writing), reigniting interest and excitement from investors and enthusiasts alike.

Despite the massive losses after the all-time highs that Bitcoin experienced, the popular digital asset has managed to climb its way back up to almost $13,000 (at the time of writing), reigniting interest and excitement from investors and enthusiasts alike.

According to reports, the DOJ is already in the midst of several cryptocurrency tax-related cases and intend on pursuing many more in the name of this cause.

However, this growing interest is not only coming from the typical parties. The spike in Bitcoin’s value has also attracted the attention of the U.S. Department of Justice as well as the IRS, both agencies who are now ramping up their efforts to identify and bring to justice those who are evading taxes on their Bitcoin gains. 

The new campaign is designed to serve as a reminder to those who are involved in cryptocurrency that they are not exempt from the law and will be punished if they are attempting to use the digital asset as a way to dodge taxes. 

Richard Zuckerman, the principal deputy assistant general with the U.S. Department of Justice’s Tax Division, made this statement at the New York University Tax Controversy Forum on June 21st: 

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]."

According to reports, the DOJ is already in the midst of several cryptocurrency tax-related cases and intend on pursuing many more in the name of this cause. Chuck Rettig of the IRS reinforced these statements, making it known that the IRS is also prioritizing the criminal enforcement of those engaging in cryptocurrency crimes and are currently staffing their agency to meet these needs. 

While certainly concerning for some individuals, these developments are not surprising and IRS investigator Gary Alford made a prediction only a week prior to the announcement, noting that it is much easier to prosecute such cases due to the improved public awareness about digital currencies: 

“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."

Are you New to Cryptocurrency? Get Started Investing Today.

The biggest thing that individuals should be aware of are the transactions that are considered to be taxable events when it comes to cryptocurrencies such as Bitcoin. For example, exchanging Bitcoin for fiat currencies, using Bitcoin to purchase goods or services, or receiving free crypto through a fork or an airdrop all count as taxable events while things such as receiving crypto as a gift or simply making a purchase do not. 

As we venture further into cryptocurrency laws and assets such as Bitcoin continue to maintain their place in our society, the most important thing to pursue is crypto education so as to avoid any potential issues that come with investing in cryptocurrency. 

Posted by Dylan B

Dylan Buckley is a writer based in California. He became interested in cryptocurrency upon discovering it in 2014 and soon started investing as well as writing for a wide variety of clients and crypto-startups in the space. When he is not producing content for individuals and businesses, he is typically working on his own self-development content or making music.

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