U.S. tax preparation company H&R Block is advising its customers not to consider evading the Inland Revenue Service (IRS) by not reporting their cryptocurrency transactions
Don’t Worry About Accuracy, Just Report Crypto Taxes
According to Yahoo Finance, H&R Block has told its crypto-owning customers to heed the IRS’ call for crypto tax compliance. In new guidelines shared by the company, the U.S. tax preparation firm encouraged its customers to try and take the initiative concerning the filing of their crypto tax returns.
Commenting on the matter, Kathy Pickering, chief tax officer at the company, remarked:
The IRS is looking for people to self-report. They’re looking for you to come forward, and they’ll be more lenient, even if you don’t get it right, if you’re disclosing.
As previously reported by Bitcoinist, the IRS has stepped up efforts to ensure stricter compliance with tax reporting guidelines for crypto owners. At the start of the year, the U.S. tax agency added a new checkbox on the tax form containing inquiries about cryptocurrency-related activities.
The inclusion of this direct crypto question on Form 1040 — additional income, may also signal the IRS gearing up to prosecute crypto owners who fail to declare virtual currency transactions as part of their tax filings.
H&R Block also advised its customers to determine their crypto tax obligations based on the nature of their virtual currency holdings. According to its guidelines to its users, the company revealed that crypto tax payments depend on: “how they use their cryptocurrency: as an investment, in their business, or as miners. If a taxpayer purchases bitcoin for investment purposes, the tax treatment is similar to buying and selling stock.”
IRS and Other Tax Agencies Keen on Crypto Tax Compliance
Back in 2019, the IRS sent warning letters to U.S. crypto owners, urging them to amend their previous returns and pay any pending interests or penalties. The IRS has also sent refunds to tax-compliant individuals who accurately reported their virtual currency dealings.
Apart from the IRS, tax bodies in other jurisdictions are also shining the spotlight on crypto tax compliance. In December 2019, Brazil’s tax office created a special penalty code for crypto tax evaders while also mandating monthly reporting of virtual currency transactions.
The UK’s tax agency — Her Majesty’s Revenue and Customs (HMRC), is also enforcing stricter crypto compliance. The body released updated cryptocurrency tax guidelines for businesses in November 2019.
Will crypto owners heed the call to file crypto tax returns in 2020? Let us know in the comments below.
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