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Zhanna Ziering Comments on the IRS's Enforcement Efforts to Collect Back Taxes on Cryptocurrency Transactions

July 26, 2019, Bloomberg Law

The Internal Revenue Service is warning more than 10,000 holders of cryptocurrency that they may be subject to penalties for skirting taxes on their virtual investments.

The IRS has begun sending letters to taxpayers who potentially failed to report income and pay taxes on cryptocurrency transactions, the agency said July 26. The IRS said it obtained the names of the taxpayers through “various ongoing IRS compliance efforts.”

. . .

Taxpayers who receive the letters “generally won’t be eligible” for an IRS voluntary disclosure program, where taxpayers can come forward with undisclosed financial accounts in exchange for the potential to reduce penalties or avoid criminal prosecution, said Zhanna Ziering, a tax lawyer at law firm Caplin & Drysdale.

However, taxpayers who haven’t been notified by the IRS and may have underpaid or avoided taxes for cryptocurrency transactions still could seek some relief by coming forward before the IRS finds them, she said. The IRS said all letters will be sent by the end of August.

Read the full article at Bloomberg Law.

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