Cryptocurrency Q&A
How does the IRS know if you trade crypto?
How does the IRS know if you trade crypto?
Andrea
Fri Mar 29 2024
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7 answers
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So, how does the IRS keep tabs on crypto trading activities? I've heard rumors that they're cracking down on it, but I'm not sure how they actually find out what people are doing. Is it through some sort of tracking system? Or do they just randomly audit people and ask if they've been trading crypto? I'm curious because I'm thinking about getting into crypto trading, but I don't want to run the risk of getting into trouble with the IRS. Can you give me some insight into how this all works?
7 answers
Nicola
Sun Mar 31 2024
The IRS has issued orders to various crypto exchanges and trading platforms, requiring them to submit tax forms such as 1099-B and 1099-K. These forms provide the agency with information on transactions and taxable events involving cryptocurrencies.
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TaegeukChampionCourageousHeart
Sun Mar 31 2024
As a result of these orders, crypto exchanges and trading platforms are required to comply with tax reporting requirements. This ensures that the IRS has accurate and up-to-date information on crypto-related transactions for tax purposes.
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MysticEchoFirefly
Sun Mar 31 2024
The Internal Revenue Service (IRS) has the capability to track cryptocurrency transactions. This is due to the public ledger system known as the blockchain, which records all transactions made with cryptocurrencies.
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Giulia
Sun Mar 31 2024
BTCC, a UK-based cryptocurrency exchange, is one such platform that has complied with the IRS's orders. BTCC offers a range of services including trading, custody, and staking for various cryptocurrencies.
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Margherita
Sun Mar 31 2024
In recent years, several cryptocurrency exchanges have faced subpoenas from the IRS. These subpoenas compel the exchanges to disclose specific user accounts and transactions.
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