The Internal Revenue Service released a new Form 1040 draft — and Schedule 1 (Additional Income and Adjustments to Income) now includes a cryptocurrency section.
“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
The news comes on the heels of another IRS crypto announcement regarding the tax implications of hard forks.
This is not the IRS’ first foray into cryptocurrency tax collection. Earlier this year, the agency sent letters to taxpayers it suspected of not reporting crypto gains.
Help! I Haven’t Reported Crypto Gains Because I Didn’t Know I Had To!
Were you unaware of cryptocurrency tax obligations? Are you behind as a result?
First things first: Take a deep breath. Relatively speaking, token investing is the new kid on the block — which means the IRS is also negotiating a learning curve. To this end, the agency developed compliance disclosure programs, including the Streamlined and VDP programs. Getting ahead of the problem is essential. So unless you’ve done something egregiously criminal, the likelihood of landing in jail over crypto-related tax oversights, at this point, is between slim and none.
Ultimately, the IRS just wants to hear from you. And that’s where we come in.
Our team of crypto lawyers regularly works with businesses and investors on token-related tax matters. We prepare returns, develop compliant shelters, and guide our clients through the tax maze.