1/Almost every taxpayer has a financial interest in some form of virtual currency, by the IRS definition.
Meaning, almost everyone should answer YES to this question, even if you don’t own cryptocurrencies.
#cryptotaxes
#perjurytrap
Meaning, almost everyone should answer YES to this question, even if you don’t own cryptocurrencies.
#cryptotaxes
#perjurytrap
2/If you answer the virtual currency question falsely, you could be charged with perjury.
Lawyers call this a “perjury trap.”
Lawyers call this a “perjury trap.”
3/Yet, most observers feel the IRS has not provided adequate guidance for taxpayers to know how to report their cryptocurrency income, especially in light of DeFi innovations.
The Government Accounting Office (GAO) asserted that the IRS could do more to help taxpayers comply.
The Government Accounting Office (GAO) asserted that the IRS could do more to help taxpayers comply.
4/Is there more than one perjury trap for crypto owners?
Yes, thre is!
Another perjury trap is question 7a on Schedule B of Form 1040, which asks:
Yes, thre is!
Another perjury trap is question 7a on Schedule B of Form 1040, which asks:
5/“At any time during 2020, did you have a financial interest in or signature authority over a financial account (such as a bank account, securities account, or brokerage account) located in a foreign country? See instructions Yes or No.”
6/Foreign crypto exchanges appear to qualify as a financial account described in this question.
7/In February 2020, the same GAO report recommended that the IRS & FinCEN make a statement about applying foreign account reporting requirements to virtual currency.
FinCEN agreed with this recommendation.
What did the IRS do?
The IRS had no comment.
FinCEN agreed with this recommendation.
What did the IRS do?
The IRS had no comment.
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