The U.S. Internal Revenue Service (IRS) has revealed its plans to seize citizens’ crypto assets in order to settle unpaid taxes. Agency official Robert Wearing made the announcement earlier this week while addressing a virtual conference. The IRS will seize cryptocurrencies and attempt to follow its usual procedures to sell them and use them to satisfy collection. This is in line with IRS guidelines that treat crypto holdings as property rather than currency.
IRS looks to clamp down on crypto tax dodgers.
The announcement follows other IRS initiatives aimed at clamping down on tax avoidance by citizens trading cryptocurrencies. At the beginning of this month, a U.S. federal court in California authorized the IRS to serve a John Doe summons to Kraken’s parent company, Payward Ventures Inc. This summons granted the Internal Revenue Service permission to demand the personal information of any U.S. taxpayer that traded at least $20,000 in cryptocurrency transactions between 2016-2020. Following that judgment, the IRS then announced plans to work with TaxBit to audit crypto transactions.
Governments worldwide are trying to regulate crypto.
The IRS is not alone in trying to ensure efficiency in crypto tax payments. Governments worldwide are scrambling to understand the cryptocurrency economy and how to best regulate it. Many governments have taken different approaches thus far, with little consistency across regions. As reported earlier, the Hungarian government announced that it intends to slash crypto tax rates to 15%. The Turkish government also announced to outlaw crypto payments last month. Cryptocurrencies have witnessed massive winning rallies this year as bitcoin reached new all-time highs several times. Altcoin also witnessed substantial growth following bitcoin’s lead. This growth prompted the government to take immediate actions to regulate the industry.