Highlights
- Virtual currency transactions are coming under intense scrutiny
by the Internal Revenue Service (IRS).
- As a result, U.S. persons who have engaged in virtual currency
transactions and failed to properly report or pay tax on these
transactions should become U.S. tax compliant or face serious civil
or criminal consequences.
Virtual currency transactions are now a prime focus of Internal
Revenue Service (IRS) scrutiny.
The IRS has numerous information-gathering tools to enforce its
taxing power, including summons, artificial intelligence, data
analytics, whistleblowers and even a taxpayer's social
media.
The takeaway from the IRS focus on this area is that individuals
should properly report and pay tax on virtual currency transactions
or prepare to pay back taxes, interest and penalties. If the
failure is willful in not complying with IRS reporting
requirements, individuals may face potential criminal
prosecution.
