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The US Internal Revenue Service (IRS) explained that those who have bitcoin or other cryptocurrencies they must not be included in the annual tax return. The condition is that these cryptocurrencies have not been bought, sold, transferred or received by other people during 2020.
In a recently published statement, the IRS clarifies that “a virtual currency transaction it does not include holding virtual currency in a wallet or account“. Nor does it include “the transfer of virtual currency from one wallet or account you own or control to another you own or control”.
Those who have sent or received a cryptocurrency, even for free, would be obliged to declare possession (this includes the air launches and the hard forks).
Those who have traded cryptocurrencies for goods or services must also do so (as well as declaring the profit obtained as in any other sale); who has sold cryptocurrencies; and those who have traded cryptocurrencies for something else, including another cryptocurrency.
An explanation that has raised more doubts among those who save in bitcoin
The explanation from the IRS sought to clear up the confusion caused by this year’s 1040 form, the draft of which, as reported by CriptoNoticias, has already been released. This form is used by US taxpayers to file their personal tax return.
One of the questions in the new version of this form says, “At any point during 2020, have you received, sold, sent, traded or acquired financial interests in a virtual currency?”
The explanation, which was intended to clear up any confusion, raised doubts Some Well, it says nothing about buying cryptocurrencies. Although the question on the form appears to indicate that, in fact, it must be stated, the instructions do not specify that this is the case.
Taxpayers are expected to declare their transactions in Bitcoin
The new IRS provisions appeal to the willingness of taxpayers to pay taxes. Due to the possibility of acquiring bitcoin and other cryptocurrencies via person-to-person transactions, it can be easy to avoid their declaration.
Shehan Chandrasekera, Director of Tax Strategy of CoinTracker, an application that facilitates the payment of taxes corresponding to cryptocurrencies, in dialogue with the press explained:
The United States has a voluntary tax system. You should report revenue correctly by default. If you are audited, you will need to justify it.
Shehan Chandrasekera, Head of Tax Strategy at CoinTracker.
The 2019 form asked for information about Bitcoin in an attachment
Form 1040 from the previous year also included a question on how to make a profit with cryptocurrencies, although it did so on an additional sheet and the declaration was not considered mandatory. Also, for some specialists, it was unconstitutional.
“The question violates many of the taxpayer’s constitutional rights and is an alarming excess of what Congress has authorized the IRS.” said Clinton Donnelly, expert on cryptocurrency tax issues.
On the current form, Donnelly had manifested itself in September 2020, his draft was barely known, which “concerns the decision to raise the importance of his new application on Form 1040 after important legal issues were raised.”
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