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Crypto Tax Reporting Failures Can Be Expensive, Even Criminal

Published 01/08/2020, 11:34 AM
Updated 01/08/2020, 01:21 PM
© Reuters.  Crypto Tax Reporting Failures Can Be Expensive, Even Criminal

The Internal Revenue Service is aware that millions of cryptocurrency transactions may still remain unreported. Taxpayers may think they will not be caught, and many Coinbase users may have thought their information would be protected until the John Doe summons proved otherwise. The best way to avoid penalties is to disclose and report as accurately as you can, showing that you did not have a willful intent to avoid taxes.

Otherwise you could face large penalties and even potential criminal investigation. Anyone convicted of tax evasion, for example, may face up to five years in prison and a fine that could be as high as $250,000. Taxpayers may think that the IRS could penalize them but might assume that they do not need to worry about any criminal implications.

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