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.

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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 a letter (CP2000) is because Coinbase sent the IRS a 1099-K detailing his $292 worth of crypto activity,” the website explained and advised those who have received similar letters 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 may be inconsistencies,” said IRS spokesman Eric Smith. “We do contact people about these discrepancies.” They have the opportunity to respond to us.”

“The 1099-K was never intended to be a form for cryptocurrency traders to report their income,” the CryptoTrader blog post said. “The form does not make sense in the context of a cryptocurrency exchange, and yet many well-known exchanges, such as Coinbase, have decided that they will use the 1099-K to report customer income information.”

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