So there’s one big bit of news that’s been worrying American crypto investors over the past week - the IRS is sending notices to investors asking them to pay for all of their back taxes for all the profits they’ve earned from investing in it. Notices will been sent 10,000 investors by the end of August - probably the ones with big holdings in crypto.
I’ve filed my taxes, but I can imagine how much of a concern this will be for tax payers as crypto becomes more mainstream. Now, I don’t have too much of a problem with this. I am all for crypto being more regulated and some compromise forming between authorities and the market. In exchange for breathing space for innovation, we have some rules.
To that end, the IRS in the press release said that it was examining how it would monitor crypto-related taxes, including using big data analytics. This is interesting - given the decentralized and pseudonymous nature of most cryptocurrencies, governments will have to come up with a viable and practical solution to implementing these checks.
One Redditor who said that he worked for the IRS said that the data being used for the matter is poor and the hope is that the announcement will spur individuals to voluntarily pay their taxes - and that the top investors will probably be priority.
Could this IRS Chase Trigger Bitcoin Dump Below $10K?
Well, below is already below $10k, and I think this news had some part to play in the matter. I fact, I wouldn’t be surprised if it went a little below, but definitely not touching the lows of this year. The other motivating factor in the recent dump is probably India’s new draft bill which does not bode well for the market in the country (though the bill has not been signed yet).
Still, I think once the situation has a more systematic approach, we’ll find the market picking up again, and people accepting that certain rules simply must be followed.
What do you guys think? Think that better laws or systems should be in place for the years to come?