Despite the fact that some 46 million American now own Bitcoin, the tax code is so far behind that the CEO of one of the largest income tax preparation services said that his firm can’t do much to help customers.
Speaking on CNBC on May 24, H&R Block CEO Jeff Jones said the lack of federal regulations means that cryptocurrency tax liability is “really not a place we weigh in with consumers much.”
He does expect that to change, however.
“Ultimately, we think it could be a place we help customers,” he said. “But today, it’s not a place where we do a lot of business.”
The IRS added a cryptocurrency question to the basic IRS 1040 income tax form in 2020. Placed prominently, the question asked taxpayers if they had “received, sold, sent, exchanged, or otherwise acquired any financial interest in any virtual currency,” in the past year. Taxpayers were warned that getting the question wrong could delay tax refunds.
In a recent report about President Joe Biden’s proposed tax changes, the Treasury Department argued that cryptocurrency exchanges and custodians should be required to report any transactions over $10,000.
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Caitlin Long, CEO of crypto-bank Avanti Financial said last week in a Twitter thread, that a crackdown on crypto is coming, but said she believed it was going to be aimed more at paying taxes than banning cryptocurrencies.
“IT’S CLEAR a US #crypto regulatory crackdown is starting but I'm optimistic bc most of the major players/agencies have spoken already & the policy is taking shape: it's “pay taxes, comply w/ laws & don't take shortcuts, & we'll enable the innovation.” It's NOT a "#bitcoin ban"
She repeated that one phrase — comply with the laws and don’t take shortcuts — over and over, saying that the message has come up repeatedly in comments by a large number of financial regulators.