The Peck Group LC
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Free 30 minute telephone consultation
Comprehensive Tax Law Representation Since 1995
We handle every aspect of tax law: preparing tax returns, representing clients during audits, resolving IRS and state tax controversies, and creating tax planning strategies for the future.

The IRS wants to stop cryptocurrency tax evasion

On Behalf of | Mar 13, 2020 | IRS |

Those who make a profit from cryptocurrency transactions generally need to pay taxes on their gains. However, the government has historically had trouble keeping track of how much a taxpayer may have earned trading or mining digital currencies in a given year. Recently, the IRS issued a statement of work asking for help in obtaining transaction data that may be held by exchanges or recorded as part of a digital wallet.

The government is hoping to eventually develop technology to compare this data to what an individual reports on his or her tax return. If there are discrepancies between the two sets of data, a taxpayer may be subject to an audit. Those who use cryptocurrency tax software should be aware that the IRS has not yet obtained their personal data. However, those who have failed to properly report their earnings related to digital currencies are encouraged to come into compliance as quickly as possible.

When the IRS receives a tax return, the organization will first check to make sure that nothing seems out of the ordinary. For instance, if a person made $30,000 in a given year, that person’s return should look similar to others who reported $30,000 in income during that year. If not, there is a chance that he or she could receive a notice from the government seeking more information.

A legal representative may review the notice and send a response in a timely manner. A tax attorney might also be able to negotiate with the IRS on a taxpayer’s behalf. This may make it easier for a person to obtain a favorable outcome in an income tax case. In some cases, audits may be settled without any changes to a tax return or with individuals receiving an even larger refund.

We insist that your taxpayer rights are protected and your options are known.

Our services are confidential and are protected under the attorney-client privilege as allowed by law.