IRS Looking At Tax Issues Linked With Bitcoin

Taxation as it affects Bitcoin is in the news again with a recent announcement by the US Internal Revenue Service (IRS) that they are looking at Bitcoin ATM with respect to the possibility that cryptocurrencies could be used for criminal activities such as money laundering and tax evasion.

The IRS Criminal Investigation head, John Fort said on November 15 that the agency is working with law enforcement to look into all aspects of the new technology with the view to ensure that it doesn’t create loopholes through which people circumvent the law.

“We’re looking at those, and the ones that may or may not be connected to bank accounts […] In other words, if you can walk in, put cash in and get bitcoin out, obviously we’re interested potentially in the person using the kiosk and what the source of the funds is, but also in the operators of the kiosks.”

Who Are Using Bitcoin ATMs?

The tax officer maintained that it is important that the identity of those using these machines are known, effectively making sure that their use conform to standard know-your-customer protocols.

“They’re required to abide by the same know-your-customer, anti-money laundering regulations, and we believe some have varying levels of adherence to those regulations.”

Presently, there are more that 4000 Bitcoin ATMs in the country where users can buy or sell the cryptocurrency at a fee. This data is from Coin ATM radar. ATMs are increasingly seen at airports indicating that many travelers view it as a ready means of exchange.

Despite the many bitcoin ATMs in the United States, tax laws are still murky regarding cryptocurrencies. John Fort considers cryptocurrency an ‘emerging threat’ stating that it lacks transparency and visibility. He maintained that it has potential to be used to circumvent compliance. This is contrary to the assertion of the Bitcoin community that believes that the digital currency is ‘transparent’.

Legal Actions May Be Imminent

Fort however told reporters at Bloomberg that the tax office has not yet filed a suit regarding Bitcoin.

 “We haven’t had any public cases filed, but we do have open cases in inventory.”

According to Suzanne Sinno, an attorney at IRS,  an attorney in the IRS Office of the Associate Chief Counsel, cryptocurrencies  have never been considered for tax exemptions even prior to the 2017 tax  law reviews.

 

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Author: Jofor Humani

Peddling words has been a passion beneath the surface. I speak less than I write...naturally. Aside speaking and writing, I walk too...good for your heart they say. I sometimes do not feel like writing. Then I enjoy quiet times which I use to think and stay with family.

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