The IRS is hunting down those who are using Bitcoin to evade taxes. In fact, the IRS sent a request to the largest Bitcoin exchange asking for all customer records, showing who bought virtual currency between 2013 and 2015. This request comes shortly after the Treasury Department’s inspector general chastising the tax agency for not taking more aggressive steps to curb unlawful activities by those using virtual currencies. Further, this request is the most sweeping single effort to track down those using virtual currency. Bitcoin users are most likely not aware that they should be tracking their losses and gains as taxable events every time they make a purchase with their Bitcoins. The characteristics of virtual currencies are enabling users to evade taxes by using traditional abusive tax arrangements online.
See Nathaniel Popper, Bitcoin Users Who Evade Taxes Are Sought by the I.R.S., N.Y. Times, November 18, 2016.
Special thanks to Jerry Hesch (Attorney, Aventura, Florida) for bringing this article to my attention.
