IRS Begins Notifying Owners of Cryptocurrency of Potential Failures to Report Income and Pay Taxes

August 30

In July, the IRS announced that it had begun sending letters to taxpayers who may have failed to properly report income and pay any tax associated with cryptocurrency transactions or who did not properly report such transactions. The IRS expects to send more than 10,000 letters before the end of August. Taxpayers who have not properly reported their cryptocurrency transactions are, where appropriate, liable for tax, penalties, and interest, and in certain cases, may be subject to criminal prosecution. Consequently, Taxpayers who own or have disposed of cryptocurrency—even those who do not receive one of the education letters from the IRS—are advised to carefully evaluate their transactions and holdings to determine whether or not they have been fully compliant with their tax and reporting obligations.

For a more detailed discussion, please see the Baker McKenzie Client Alert, “IRS Begins Notifying Owners of Cryptocurrency of Potential Failures to Report Income and Pay Taxes,” distributed on August 13, 2019.

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David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. He is currently the Chairman of the Litigation Department of the firm’s New York office. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. Since 2008, David has been included in Chambers for his expertise in international arbitration.

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