Shapiro Says IRS Playing Catch-Up on Crypto

The IRS is updating its cryptocurrency tax guidance, responding to a market that has grown significantly since 2014. Inspired by tactics used against Swiss banks, the IRS aims to enforce compliance without extensive audits. New guidance addresses the tax implications of Bitcoin and Bitcoin Cash, raising questions about what constitutes taxable income. Crypto exchanges await clear rules from Congress, as current IRS enforcement involves legal actions like suing Coinbase for records. Despite being late, the IRS is working to provide clarity, having sent warnings to 10,000 investors about tax obligations.

What prompted the IRS to update its guidance on cryptocurrency transactions?

• Pressure from international banks

• A decrease in cryptocurrency value

• A new law passed by Congress

• The growth of the cryptocurrency market since 2014

How did the IRS previously handle Swiss bank accounts?

• By ignoring the issue

• By auditing every account holder

• By gathering data and scaring account holders to come forward

• By prosecuting all account holders

What is a key issue addressed by the new IRS guidance on Bitcoin and Bitcoin Cash?

• The environmental impact of Bitcoin

• The legality of Bitcoin mining

• The taxable status of Bitcoin Cash received unexpectedly

• The security of Bitcoin transactions

What is the current challenge faced by crypto exchanges regarding IRS guidance?

• They must provide free tax services to users

• They have been banned from operating in the US

• They are waiting for clear guidance from the IRS and Congress

• They are required to report all transactions immediately

What action did the IRS take against Coinbase to obtain records?

• They sued Coinbase

• They issued a public warning

• They partnered with Coinbase

• They ignored Coinbase