STOCKS TELEGRAPH

Tag: IRS

  • Turkey’s new policy on crypto monitoring

    Turkey’s new policy on crypto monitoring

    The Turkish government has not been a fan of cryptocurrencies – to say the least. The government likes to maintain a strict control over its digital payment ecosystem and any disruptions are not tolerable. The Turkish government had also banned PayPal in the country for the same purpose. Now, the rise of cryptocurrencies has posed a challenge for the government and the regulators in the country.

    The Turkish Minister of Treasury and Finance Lutfi Elvan announced a new policy that forced cryptocurrency exchanges in the country to inform the Financial Crimes Investigation Board (MASAK) about crypto transactions that are valued above $1,200. The country has banned the use of cryptocurrencies as a mode of payment and now the regulatory body, MASAK, is given the power to oversee and audit cryptocurrency exchanges. MASAK has also prepared a detailed guide for crypto exchanges in the country to be followed without exception.

    Regulation of the cryptocurrency sphere has been regarded as a complex task throughout the world but now as the industry is set to become larger than life itself, governments. Have proactively started taking measures to control and regulate the market as much as possible. The South Korean government has been one of the most active in terms of cryptocurrency regulation. A law has been imposed which requires accounts on crypto exchanges to be based only on real names while another law imposes a 20% capital gains tax on cryptocurrency profits.

    The IRS, too, has finally put its approved “John Doe” summons to use. A Federal court in California granted a motion for Kraken to provide client information to the tax regulatory authority. The wave of regulation in the cryptocurrency sphere may only be the beginning of what is to come.

  • Kraken to provide information to IRS, Californian federal court

    Kraken to provide information to IRS, Californian federal court

    Regulators throughout the world had been struggling with the complexities of the cryptocurrency industry. Because the blockchain technology is novel and not widely understood, regulating the market had not been an easy feat.

    A federal court in California has ordered the cryptocurrency exchange to provide information about users who have conducted transactions worth $20,000 or more in a year to the Internal Revenue Service in lieu with the “John Doe” summons that the IRS had gotten approved earlier.

    Where South Korea has launched a crackdown of its own on the cryptocurrency industry because of increased tax evasion and money laundering, the US is not lagging far behind. The Internal Revenue Service had held the cryptocurrency industry accountable for almost $1 trillion uncollected taxes. The tax authority has more than disdain for the crypto sphere and has launched a crackdown of its own. The IRS had gotten “John Doe” summons approved earlier which gives the tax regulator immense power.

    However, after a brief cool down the regulator has once again resumed its crackdown with full force. Utilisng the John Dow summons, the Internal Revenue Service had gotten approval from a North California federal court to access the accounts of users with more than $20,000 transactions worth on the leading crypto exchange, Kraken.

    Crypto holders are obligated to meet the same tax obligations – which many are not. The John Doe summons are an effort of the regulator to bring equity to the industry and punish tax evaders. The John Doe summons allow the IRS information about all taxpayers in a specified class – say, with transactions worth $20,000 and above. With the immense power of the John Doe summons, the IRS is set to take the crackdown on cryptocurrency industry to the next level.

  • The IRS is After Cryptocurrency Holders With John Doe Summons

    The IRS is After Cryptocurrency Holders With John Doe Summons

    The United States Internal Revenue Service is after the cryptocurrency market and it is not going to back off anytime soon. The IRS Commissioner, Charles Rettig, had held the crypto market responsible for a gap of $1 trillion in the tax revenues. Per the commissioner the complexity and lack of transparency in the crypto market when it comes to taxpayers’ information has resulted in uncollected revenues.

    The commissioner had also stated IRS’s cybercrime unit to be actively looking into the matter. Operation Hidden Treasure has been initiated by the IRS which tracks taxpayers who omit cryptocurrency holdings from their tax returns.

    A federal court has authorized the IRS to serve John Doe summons to Circle Internet Financial Inc. and any of its subsidiaries or affiliates. The Circle is a digital currency exchanger based in Boston and the IRS plans on accessing records of Americans who have engaged in any sort of business through Circle. The John Doe Summons does not identify or list any names, neither does it alleges the Circle of wrongdoings. It is a mere tool of the IRS to identify any person or group of persons who are suspected to have been non-compliant.

    According to the commissioner of IRS, the authorization of John Doe summons has brought the IRS one step closer to its aim of tax collection. It will enable the IRS to identify tax evaders and enforce the law.

  • IRS holds crypto responsible for $1 trillion uncollected tax

    The Internal Revenue Service has stated that each year around $1 trillion is failed to be collected. The government agency partly holds innovations in the cryptocurrency sphere responsible for this.

    IRS Commissioner Charles Rettig testified in front of the Senate Finance Committee citing cryptocurrencies to be a major source of uncollected tax revenues. Cryptocurrencies are taxed as capital assets which imposes a capital gains tax on the premium trade of the cryptocurrency; however, a majority of investors and traders are not aware of the capital gains trade. Moreover, the cryptocurrency market is largely unregulated with only bits of taxpayers’ information available to government agencies which further jeopardizes the tax collection process.

    The commissioner also specifically mentioned non-fungible tokens and the replicative nature of cryptocurrencies. The cryptocurrency market is continuously evolving with new innovations everyday which makes it hard for tax payers and tax collectors to stay up to date with requirements and regulations. NFT in particular have raised a lot of questions related to its taxation.

    Rettig furthered the importance of cryptocurrency reporting. The disclosure of taxpayer information is also crucial for the improvement in tax collection process. The commissioner assured the committee that the IRS cybercrime unit active on the dark web following cryptocurrency transactions for tax fraud and evasion.