David W. Klasing, a boutique Californian tax firm, had its Tax Law Office issue out a public release. This release warned investors that the US Internal Revenue Service, or IRS, is going to start a severe bout with users of Coinbase.
Time To Right Your Wrongs
The dual-licensed capital allowance specialist and tax lawyers of the firm state that IRS enforcement activity has begun to increase against Coinbase users, in particular, that fail to comply with the reporting and tax requirements.
The firm warned that tax evaders run the risk of serious criminal and civil trouble going down the line. Urging anyone that has failed, truthfully or otherwise, to report their virtual currency holdings in their past returns, they should correct this now. The same goes for anyone that had filed a misleading or otherwise incomplete picture of your respective cryptocurrency holdings. The firm stated that when the IRS mandates an audit or criminal tax investigation, it’s too late to make amends or use the voluntary disclosure program.
US Agencies Going Hard Against Coinbase Tax Evaders
In October, Coinbase had released a new transparency report, which the law firm claims must be a major wakeup call for the various users of the exchange. The report itself made it incredibly clear that both the Criminal Investigation Unit, the CIA, and the FBI, not to mention the IRS, are filing information requests with the exchange.
The uptick in the IRS doing enforcement activity against Coinbase users dodging tax, in particular, makes it clear that the exchange itself is now working closely with the federal authorities.
Coinbase Not Refusing IRS Demands
The firm noted that the data the IRS requested, as shown by the October report, makes it clear that the agency is expressly investigating these transactions and comparing it to its own taxpayer data. From there, it’s a simple matter of finding discrepancies and then hunting down those Coinbase users who thought it’d be easy to dodge the taxman.
As is already reported, the US courts seemed to be on the IRS’s side, upholding its authority when it comes to summoning comprehensive financial records and data as part of their respective investigations within Coinbase and its users.
Always An Agenda
It should be noted, however, that the tax law firm had a very clear agenda through doing this warning. At the end of its warning, it stressed the skill of its tax attorneys and CPAs, promising the best possible advice for any “errors” someone could have done in that position. Further promises range from preventing future “mistakes” and mitigating any damages for things that already happened.
As the crypto industry at large becomes more and more regulated, it’s a natural expression that taxation will become the norm. Make no mistake, this is a financial asset, and speculation could reap some serious rewards for those with their ears on the ground. As such, the government will demand its cut, as it demands it from any other booming industry.
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