IRS Warns About Bitcoin Tax Evaders Despite Acknowledging Being Behind The Crypto Investor Curve
- IRS warns about Bitcoin tax evaders saying they are going behind them
- Users should pay taxes when they spend or sell their digital assets
The Internal Revenue Service (IRS) is going to be hunting Bitcoin (BTC) users that do not pay their taxes. This is what Gary Alford, IRS tax investigator, says about investors in cryptocurrencies. He mentioned that the IRS has been lax about pursuing new tax cases because the industry is just new and it is just expanding. However, he mentioned that the IRS is already ahead of the curve.
IRS To Investigate Bitcoin Tax Evaders
Mr. Alford, that talked at a panel discussion about tax consequences of virtual currencies, said that it would be easy for a prosecutor to convict a Bitcoin tax evaders since people know more about the digital currency. Before it would have been more complicated because most jurors never heard of Bitcoin.
About it, he commented:
“We’re usually behind the curve. But in this case, we are ahead of the curve. We already are aware that there were cases to be made. We just didn’t know if we were at the point where we can bring it for criminal prosecution. We believe we are at that point now.”
Gary Alford became famous after his role in the Silk Road case in which Ross Ulbricht was arrested for his involvement in the the darknet marketplace. At the moment, he is serving a double life sentence for operating the Silk Road marketplace that facilitated the sale of illegal drugs.
Mr. Alford has warned retail investors that Uncle Sam is behind them and that the agency is aware they are not paying their taxes. Walter Pagano, a tax partner at EisnerAmper, an accounting firm, said similar things as Alford. He urged financial advisers to make sure clients are paying taxes on their crypto capital gains because these profits are taxable in the same way that cap gains.
This is something that the community does not like especially because there are several individuals that label themselves as libertarians and that are generally opposed to the influence of the government. John McAfee is currently having some legal problems with the IRS.