Reporting of cryptocurrency gains not consistent

On Behalf of | Jan 13, 2018 | Firm News, White Collar Crimes

When residents in New York hear reports about people being charged with tax evasion or other forms of white collar crime, it can be all too easy to assume that a person was consciously trying to do something wrong. This, however, is not necessarily the case. Many tax and investment laws and guidelines can be complex and lead to difficulty in knowing what really needs to be done when. In addition, many loopholes in the tax code essentially help people reduce their tax liability.

Crytocurrencies are one area where the laws are anything but black and white. For example, Bitcoin which is globally the most common of these currencies is not considered actual legal money in this country. Therefore, people who would normally and accurately report capital gains or losses on their tax returns might logically omit any gains associated with Bitcoin given that it is not currently a legal tender.

One LendEDU survey taken just two months ago indicates that more than 33 percent of people who invest in Bitcoin do not plan to report gains related to this cryptocurrency on their 2017 income tax returns. The Internal Revenue Service appears to be seeking ways to avoid this and to collect taxes on these gains. One exchange has recently been ordered to provide data to the IRS on some of their Bitcoin investors.

Anyone in New York who is concerned about the possibility of a tax fraud offense might want to reach out to an attorney with experience in defending white collar crime charges.

Source: The Motley Fool, “36% of Bitcoin Investors Plan to Commit Tax Fraud This Year,” Sean Williams, January 7, 2018