Now it is going to become more difficult for cryptocurrency holders to avoid cryptocurrency tax in the United States as the Internal Revenue Service (IRS) is updating its tax form 1040 that will include a mandatory question related to the use of crypto activities. It is compulsory for taxpayers to answer this question.
Stripping away excuses for ignoring taxes
According to the latest report from Wall Street Journal (WSJ) published recently, the US Internal Revenue Service (IRS) is bringing a new change in its federal income tax form 1040 of 2020 in order to make sure that no taxpayer can avoid cryptocurrency taxes. A mandatory question will be put into the tax form 1040 for cryptocurrency taxpayers who make excuses to avoid tax.
The new tax form will require them to answer either “Yes or No” to the question. The question is given below:
“At any time during 2020, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?”
Now there is no room for cryptocurrency investors to make excuses for ignoring taxes. It is mandatory for them to answer this question. The new devised tax form is basically a trap to catch those crypto investors who escape from paying cryptocurrency taxes. But, now, they would not be able to escape it.
The tax expert Ed Zollars was the one who showed a reaction to this newly-proposed tax form 1040 of the year 2020. He said:
“This placement is unprecedented and will make it easier for the IRS to win cases against taxpayers who check ‘No’ when they should check ‘Yes”
IRS’ this initiative shows that it is increasingly prioritizing cryptocurrency taxation. Not only the United States’ IRS is taking cryptocurrency taxation seriously, but other governments from around the whole world are also emphasizing the crypto taxation as well. For instance, in the month of March, the tax agency of Australia the Australian Taxation Office (ATO) reminded cryptocurrency traders about their crypto tax obligations.