Home Coins Bitcoin (BTC) IRS Prioritizes Cryptocurrency, Now First Question on 1040 Tax Form

IRS Prioritizes Cryptocurrency, Now First Question on 1040 Tax Form


1596040331 111 Crypto Hardware Wallet Firm Ledger Hacked One Million Customer Emails

The new U.S. tax form is out and the cryptocurrency question is the first one on the main 1040 tax form used by about 150 million people to file their taxes. The Internal Revenue Service (IRS) requires all tax filers to declare whether they have received, sold, exchanged, or acquired any cryptocurrencies.

IRS Focuses on Crypto

The IRS has published a draft tax form for the 2020 filing. The question about cryptocurrency is now the very first one on Form 1040, the main tax form used by individual U.S. tax filers. Every year, about 150 million people use this form to file their taxes.

The question reads: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” It only requires a yes or no answer.

IRS Prioritizes Cryptocurrency, Now First Question on 1040 Tax Form
IRS’ 2020 draft tax form showing that the cryptocurrency question is the very first one on Form 1040, which is used by about 150 million individuals in the U.S. to file their tax returns.

The IRS began including the cryptocurrency question in its tax form last year. However, the question was previously on Schedule 1, the form used for declaring “Additional Income and Adjustments to Income.” Some tax experts believe that the agency’s crypto question is unconstitutional.

IRS Prioritizes Cryptocurrency, Now First Question on 1040 Tax Form
IRS’ 2019 tax form showing the crypto question on Schedule 1, the form used for declaring additional income.

Twitter user Justin Winston Ono Wales, who said he is a crypto lawyer, believes that the IRS’ question “is way too broad and should be challenged.” He explained: “If you get paid in crypto, you must declare it as wages. If you realized gains from a crypto investment, you must declare it as a cap gain. But constitutionally, the gov should not know whether you purchased, received, or acquired crypto because crypto is not just money … public chains like Bitcoin requires a native currency (BTC) to access its network. BTC is sound money, but also much more,” adding:

The updated IRS form doesn’t ask you to list your crypto holdings (yet), but to declare if you received or sold crypto within the year no matter the reason. This information is beyond the purview of information the IRS needs to do its job.

1595889402 943 Americans to Buy Bitcoin With Their Second Stimulus Checks After1595875088 428 29 Cryptocurrencies Delisted on Liquid Exchange to Comply With Singapores

The IRS has made no secret of attempting to collect more taxes from cryptocurrency owners. Last year, it sent out about 10,000 letters to people it suspected of owing crypto-related taxes reminding them to pay. However, the Taxpayer Advocate Service, an independent organization within the IRS, says the letters violated taxpayers’ rights.

The IRS issued new cryptocurrency tax guidance in October last year to update the one published in 2014. At the end of June, the agency requested information about privacy coins and technologies that obfuscate crypto transactions. The following month, bitcoin investor Jim Harper filed a lawsuit against IRS Commissioner Charles P. Rettig and a number of agents for unlawful seizure of financial records from crypto exchanges.

What do you think about the IRS prioritizing the crypto question? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, IRS

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





Source link

- Advertisement -
Mr Bitcointe
Mr Bitcointehttps://www.bitcointe.com/
“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel
473FansLike
76FollowersFollow
4,567FollowersFollow
5,261FollowersFollow
1,577FollowersFollow
2,230SubscribersSubscribe
USD - United States Dollar
EUR
1.17
GBP
1.29
CHF
1.09
NOK
0.11
JPY
0.01
CAD
0.75
AUD
0.71

Most Popular

Malaysian billionaire steps down to pursue ‘horse currency’ offering

The founder of Malaysian investment giant Country Heights Holdings is stepping down from his position to focus on issuing a cryptocurrency.According to a...

‘DeFo’ staking enabled for Waves’ Neutrino stablecoins

U.S.-based cryptocurrency exchange Waves.Exchange, which supports the price-stable multi-asset Neutrino protocol, is introducing a way for crypto traders to earn passive income through stablecoin...

Uniswap Captures $2 Billion Locked, Dex Volume Outpaces Second-Largest Centralized Exchange

The decentralized exchange (dex) built on Ethereum, Uniswap has accumulated a whopping $2 billion in total value locked (TVL) this week. Tuesday’s...

‘No coiner’ TikTok star launches finance podcast with Bitcoin bull Pomp

A 21-year-old social media star famous for his TikTok videos is entering the crypto space, guided by Bitcoin bull Anthony ‘Pomp’ Pompliano.Bryce Hall has...
bitcoin
Bitcoin (BTC) $ 10,769.79
ethereum
Ethereum (ETH) $ 356.17
ripple
XRP (XRP) $ 0.240900
tether
Tether (USDT) $ 0.999499
bitcoin-cash
Bitcoin Cash (BCH) $ 228.73
bitcoin-cash-sv
Bitcoin SV (BSV) $ 172.74
litecoin
Litecoin (LTC) $ 45.55
eos
EOS (EOS) $ 2.58
binancecoin
Binance Coin (BNB) $ 28.59
okb
OKB (OKB) $ 6.09
tezos
Tezos (XTZ) $ 2.19
leo-token
LEO Token (LEO) $ 1.26
cardano
Cardano (ADA) $ 0.098818
monero
Monero (XMR) $ 99.16
stellar
Stellar (XLM) $ 0.073026
chainlink
Chainlink (LINK) $ 9.89
huobi-token
Huobi Token (HT) $ 4.60
tron
TRON (TRX) $ 0.025941
usd-coin
USD Coin (USDC) $ 1.00
dash
Dash (DASH) $ 67.68
neo
NEO (NEO) $ 19.85
iota
IOTA (MIOTA) $ 0.270284
nem
NEM (XEM) $ 0.118149
zcash
Zcash (ZEC) $ 60.43
maker
Maker (MKR) $ 518.21
paxos-standard
Paxos Standard (PAX) $ 1.00
ethereum-classic
Ethereum Classic (ETC) $ 5.38
vechain
VeChain (VET) $ 0.012859
true-usd
TrueUSD (TUSD) $ 1.00
ftx-token
FTX Token (FTT) $ 3.64
kucoin-shares
KuCoin Shares (KCS) $ 0.879047
waves
Waves (WAVES) $ 2.45