New IRS Notice Could Be Trouble For Crypto Investors but Revenue Service Says It's Not An Audit

The U. S. Internal Revenue System (IRS) has recently posted a new video on social media talking about the CP2000 notices it sent to people who did not pay their taxes as they should. This has troubled crypto investors, as most of them did not know how to pay their taxes due to lack of clarity from the IRS.

While the CP2000 notice is not really directly related to crypto, many crypto investors are bound to be affected by it because of a single fact: the IRS expects them to magically know all the rules. The crypto tax legislation in the U. S. is quite confusing and old. Because of this, people often report it wrong.

Several exchanges divulge the information of its clients with the U. S. without ever informing them, so they may receive a letter if their tax filings do not match what was expected. Not many people know, but the law requires U. S.-based exchanges to do it.

According to the IRS, CP2000 notices are not audits, but they work in a similar way and people still have to answer them within 30 days. They may contest what is in the letter, but they will have issues if they choose not to respond to it. If someone just ignores the letter, the person will receive a CP3219A letter, also known as a statutory notice of deficiency.

Unfortunately, while the IRS does not decide to create a clearer regulation to determine how cryptos work, crypto taxes will still be too complicated. Because of this, investors will possibly continue to receive these ominous letters.

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Gabriel Machado
Brazilian journalist who is interested in the future of the financial world. Has a special interest in the blockchain technology and the global financial markets. Covers economic and technology news with a focus on the fintech industry and has been writing about the cryptocurrency market since the start of 2017.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


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