In 2 months, US residents must submit their annual federal tax returns and that includes every penny made from Bitcoin or any altcoin transactions. The IRS already has an estimated 14,000 records of people who transacted cryptocurrency on the popular exchange Coinbase from 2013 to 2015 and it intends to go after everyone who tries any form of tax evasion using Bitcoin or another cryptocurrency used for getting back fiat.
“It’s possible to use Bitcoin and other cryptocurrencies in the same fashion as foreign bank accounts to facilitate tax evasion,” said Don Fort, who heads the agency’s criminal investigation division
Back in 2016, the IRS contracted the blockchain firm Chainalysis to assist with the regulatory efforts to identify US residents who didn’t pay any taxes for their cryptocurrency investment profits. It’s not entirely clear how the IRS will tackle 2018 yet but what’s certain is that they will focus on cryptocurrency exchanges and brokerage platforms where people use to convert their virtual wallets into fiat.
With a current market cap of $450 billion ($800 billion in early January), it’s pretty clear there’s a big slice of the pie that got overlooked and the US gov is trying to “catch up”. Let’s just hope the future regulatory endeavours made by the US government, especially towards ICOs, won’t delay any innovation in the crypto space.