Expert Opinions on IRS Cryptocurrency Taxation Law
Alex and Matt Metras, an Enrolled Agent with MDM Financial Services, had a roundtable discussion with host Salvatore Vescio to breakdown the increased IRS scrutiny of cryptocurrency taxation.
IRS educational cryptocurrency letters 6173, 6174, 6174-A were recently sent to taxpayers the IRS thinks hold crypto directing them to reporting guidance. This is the second round of IRS crypto letters following the first round of letters in 2019, which for the most part was associated with the Coinbase summons. This more recent round seems to be focused on letters 6174 and 6174-A and appear to extend outside of just Coinbase users and targets crypto holders on other exchanges.
“I don’t see any reason why the IRS would not continue bolstering its efforts to tax and enforce crypto, especially as it is becoming more and more mainstream,” Alex said.
The group also discussed potential challenges to the IRS in terms of its collection efforts of crypto taxation under its interpretation of the U.S. Tax Code because there is minimal guidance from the IRS leading to wide open issues ripe for challenges, including bringing refund claims.
“The IRS fears adverse case law with respect to cryptocurrency,” Alex said. “And it is coming with people wanting to challenge these issues.”
Episode segments focus on the following topics:· The 2020 IRS Educational Letters
· DeFi and IRS Compliance
· Future of Cryptocurrency Taxation
· A Crypto De Minimus Exemption
· Draft Form 1040 Crypto Question
· Taxing Crypto Staking
· Challenging the IRS
· Crypto Tax Predictions
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