The Internal Revenue Service (IRS) is in a bind. The tax gap – the difference between the taxes paid and the ones owed – has increased, reportedly topping $500 billion a year. This means they’ll need additional funding to pursue any potential plans, such as a cryptocurrency tax plan.
This gap exists for different reasons. It varies from those who report less than their liability on their tax returns, underpayment to non-filing.
Just this morning, a panel on CNBC’s Squawk Box agreed that the agency needs access to funds to reduce the tax gap and enforce its policies. But, this doesn’t seem like a priority for the Trump administration or Congress. Without providing resources for enforcement, it doesn’t matter the type of tax plan that is pushed forward by the government, there will always be money on the table.
IRS’s Clarity for Cryptocurrencies
After so many calls for clarity on cryptocurrency taxes, the IRS finally beamed its light on the sector. A month ago, the IRS provided an update to the popular Form 1040, which asked taxpayers whether they had made any transactions in cryptocurrencies. The agency also published guidelines on how it views cryptocurrency taxes but not before it created confusion on how it would tax airdrops and hard forks, going forward. But, none of these would matter if it can’t go after tax evaders. Read More...