Make a fortune with cryptocurrencies and hide everything from taxes? „A catastrophic idea“, recalls this lawyer
The US shows the way forward – The growing use of cryptocurrencies highlights new issues, especially in terms of taxation. Thus, several exchange platforms are closely observed by the authorities, with the aim of detecting possible irregularities.
Cryptos, an asset like any other in the eyes of the tax authorities
Tax Law Office is a tax firm specializing in wealth management and tax optimization. Its leader, David W. Klasing , reminded his clients that many people hold cryptocurrencies and often forget to declare them to the tax authorities. Quoted by CoinTelegraph , he explained that some investors do it knowingly, while others simply ignore the regulations.
Cryptocurrencies have a reputation as a “separate” asset , which can make it seem easy to hide from taxes . However, the majority of investors use brokers or trading platforms to make their trades. These platforms are regulated according to the standards of the country and actively collaborate with the authorities. In the United States , for example, tax lawyers have reported noticing an increase in inquiries from the IRS (the US tax authorities) to them.
Coinbase leads by example
Last month, Coinbase released a transparency report aimed at demonstrating its active collaboration with governments around the world. The report revealed 1,914 requests , issued by “legitimate governments” in countries where Coinbase operates. These requests mainly take the form of „subpoenas“ , but also „search warrants“ . According to the firm, 90% of these requests were made by the United States, the United Kingdom and Germany.
The publication of this report serves several purposes. First of all, Coinbase wishes here to embody righteousness and compliance, by agreeing to collaborate with different governments. Then, this report takes the form of an awareness campaign for people who forgot to report all cryptocurrency income.
Finally, the transparency report shows American dominance in the requests made. Indeed, this massive request from the IRS aims to recover as much information as possible on taxpayers‘ assets. This will compare Coinbase’s data with that reported by Americans. This process will help to detect possible irregularities.