The US Internal Revenue Service (IRS) has sent cryptographic letters to its holders demanding repayment of large government debts. This was reported by CryptoTrader.Tax.
This is the notification of form CP2000 – this is the case where the IRS detects discrepancies between the information submitted by taxpayers and their own data. Some users of the Coinbase crypt exchange have reported receiving such letters.
One of CryptoTrader.Tax’s clients claimed that the IRS accused him of underreporting his 2018 income and demanded an additional $127,000 in taxes and penalties. According to the IRS, he did not include his investment in crypt currency in the declaration.
„In the last two days we have been contacted by dozens of people who have received the same notification from the service,“ it says.
The company believes that the IRS was wrong and the problem is caused by the reporting methods of Bitcoin Optimizer and other platforms. They use Form 1099-K instead of 1099 or 1099-B.
„The 1099-K is not intended for cryptocurrency exchanges. It is designed for platforms where payments are received directly from third party merchants such as Uber, Lyft or Etsy,“ said David Kemmerer, head of CryptoTrader.Tax.
This is not the first time that cryptovite traders have been notified by the IRS. In July 2019, the service requested that revenues from transactions with digital assets be reported, and a month later, the exact amount of money not paid to the budget.
In the first transparency report Coinbase reported on user data requests from the IRS in order to find inconsistencies with its information.