IRS Sends Notices of Debts to People Who Don't Have Debt
Cryptocurrency traders receive letters from the Internal Revenue Service (IRS) that mistakenly say they owe thousands of dollars in taxes due to inconsistencies in tax forms. The publication told more about this. Fox News.
CryptoTrader.tax, a cryptocurrency tax calculator and software company, reported on its blog that it was contacted by "dozens of people" who received emails informing taxpayers that their income information elsewhere did not match the income reported in tax returns.
One of the traders received a letter that he owed $ 127 in taxes and penalties for understating his income due to the fact that he did not indicate his investment in cryptocurrency on his tax returns.
On the subject: If you have tax debt, wait for an IRS agent to visit
“The reason this taxpayer received the letter (CP2000) is because Coinbase sent IRS 1099-K detailing its $ 292 worth of crypto activity,” the website explained and advised those who received similar emails from the IRS , notify your tax advisors.
The IRS advised that every time it receives 1099-K reports from third parties, it tries to match the reports to individual tax returns. In the event of a discrepancy, the IRS sends letters to CP2000 so that taxpayers have the opportunity to respond and understand the situation.
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“There could be inconsistencies,” said IRS spokesman Eric Smith. - We do contact people about these inconsistencies. They have the opportunity to answer us. "
“The 1099-K was never intended as a form for cryptocurrency traders to report their earnings,” says the CryptoTrader blog post. "The form doesn't make sense in the context of a cryptocurrency exchange, and yet, many well-known exchanges, such as Coinbase, have decided that they will use 1099-K to communicate customer income information."
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