Some of you will find this interesting. From CNBC: What happens if you don't disclose crypto activity this tax season https://www.cnbc.com/2022/01/25/wha...are|com.apple.UIKit.activity.CopyToPasteboard
I was wondering how the IRS would even be aware that you've dabbled in crypto so that they'd know to come after you, and then... Another risk is whistleblowers, who can report missing activity to the IRS for a percentage of penalties collected, Losi from PIASCIK said. “The number one way the IRS finds out about tax cheats is a former business partner or former spouse,” he said. Yep, it makes sense now.
Makes you wonder how many people actually got cracked down on for tax free internet shopping (and subsequent non-reporting) over the years.
They force crypto exchanges like Coinbase to report your activity. This is why Coinbase, Kraken, et al require all sorts of information from you, like SSN, webcam photo, driver's license, etc. They are forced to implement much of the same Orwellian measures as US banks, possibly even more, like the Anti-Money-Laundering (AML) and Know Your Customer (KYC) measures that emerged in the 1970s as the US government intensified its drug war efforts. There's no way for a government to know about private transactions that don't use the exchanges. Technical users can move Bitcoin and similar currencies without exchanges, and this was the original intent. It's just like any other private transaction at that point, or like handing someone traditional cash.
The following is a sampling of what the IRS can do if you fail to resolve your tax issues: File a tax lien against you Levy your bank account Garnish your wages Close down your business Seize and sell your home Damage employment and business relationships Assess you personally for corporate employment taxes Put you in a monthly installment payment arrangement you can't afford Contact your banker, neighbors, friends, and business associates concerning your tax liabilities Go after other people to whom you have transferred your assets
I printed out a nice 1099 from robinhood today. But the printout from paypal crypto...well I hope my tax man can understand it.
Don't feel too badly . . . you're far from alone. Many folks will become very disenchanted with the time it takes to file their taxes because of this . . . either that or with how much they have to pay someone else to do so.
