Credit Karma, a free credit and financial management platform, located in San Francisco, California said that not more than 100 people out of 250,000 who have filed for income tax in the USA stated their cryptocurrency returns with the Internal Revenue Service (IRS).
Data collected by a research company shows that only a minor part of the population of US taxpayers who own cryptocurrency showed their tax gains or losses to the IRS. The percentage of Americans who reported their cryptocurrency transactions is less than 7% of the total population who own them.
Rohan Prathap, a cryptocurrency investor from New York spoke to AMBCrypto and says,
“Our cryptocurrency community is bringing the stricter regulations upon themselves, just two days ago we have people from the government saying that our community needs to self-regulate and paying or declaring taxes should be done voluntarily”
Mollin Rockhart, another Bitcoin investor from Chicago spoke to AMBCrypto and had a different view,
“Why should I give my money to the government? I am working hard and paying my regular taxes, this money I make from Bitcoin is my own money. Until there are clear-cut regulations or a mandatory clause where I need to declare it, I won’t be doing it”
A survey conducted by Credit Karma along with Qualtrics on 2000 American traders showed that only a percentage or people showed their crypto profits to IRS which are taxable. Majority of the people around 59% said that they never revealed any such information to the IRS.
Rupert Walton, a Yoga Guru and a cryptocurrency investor, says,
“The regulations are not clear right now, yes but it is safer to show your Bitcoin profits on the tax returns. IRS won’t be silent for long, once regulations are in, all the people who didn’t show their returns are going to be in for a shock”
Cryptocurrency has become a big area of investment in the US; Coinbase a US-based crypto exchange said that it has about 10 million registered members using its services although it not known whether all of them are based the US or not. Bitcoin price has grown up substantially from $1000 to cross five figure digits.
It is not the first time that people are avoiding taxes on cryptocurrency it has a history of its own. Cryptocurrency billionaires like Mike Novogratz even warned against fellow traders’ mentality to not to pay taxes on their crypto income. He recently said,
” Listen, the IRS is going to come after people. People are making real money now. So the IRS isn’t stupid.”
US tax authorities consider cryptocurrency as a property and normal federal tax principle for the property transactions is applicable for cryptocurrency transactions.
Subscribe to AMBCrypto’s Newsletter