30 May 18

Cryptocurrency IRS Tax Fraud Lawyers

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Last Updated on: 3rd August 2023, 09:43 pm

There are a number of situations in which cryptocurrency trading or other actions may be deemed a taxable event. In fact, a lot of those who were early to the game with cryptocurrency are now having to pump the brakes to try to figure out how they will pay taxes on this relatively new form of currency.

The IRS is definitely giving cryptocurrency a harder look in terms of taxing it as the currency starts to gather more attention in the media. It was once something that was on the edges of the financial world and most people did not bother with it or worry about it. Now, it has gained national traction and many more people are paying attention to the trends in cryptocurrency than were before. With that in mind, it is important that we all recognize just what situations may come up in terms of taxes and the IRS as it relates to cryptocurrencies.

When Is Crypto Taxable Income?

There are specific circumstances in which cryptocurrency may be considered taxable. These include:

Accepting cryptocurrency as payment for goods or services sold by your business
You were paid as an employee in part or in whole by cryptocurrency
You worked as a contractor and received some payment in cryptocurrency

Any of these events would definitely be deemed as taxable by the IRS. It would mean that you would need to pay up your fair share on those proceeds just as you would if you had been paid in regular cash.

Keeping Good Records

A lot of people make at least some of their income by trading in cryptocurrency. There has been a whole speculative market that has opened up as a result of many more people gaining an interest in these currencies. The media has helped to fuel some of the speculation without a doubt, but there are a lot of people who are interested nonetheless.

When you look around at all of the excitement generated by cryptocurrencies it is easy to want to jump into the frenzy yourself. That is exactly what a lot of people have done. However, not everyone has exactly accounted for how they are going to keep track of the funds that they have moving in and out of cryptocurrencies. It is definitely a problem that we need to address if we are to understand where we stand with the IRS and taxes.

It is important to keep great records of all of your transactions with cryptocurrencies. You should keep a running log of when you make an investment, when you sell that investment, and any profit or loss that you generate from that trading action. Maintain that activity log with every transaction that you make.

Some cryptocurrency platforms may keep a running activity log for you, and that can be helpful, but you should probably keep your own set of records as well just as backup. You never know when you might need to defend some numbers that you have generated in relation to your cryptocurrency trading.

Hiring A Lawyer

The last thing in the world that you want to have to deal with on your plate is an investigation by the IRS into the trading that you have been doing in cryptocurrencies. Even if everything is one-hundred percent above board, it can be difficult to present your case in an effective way if you are not able to have helpful legal representation right by your side.

An attorney who understands tax law as it relates to cryptocurrency is an incredibly valuable resource to have. Keep in mind that your attorney may have to explain what cryptocurrency even is to a lot of members of a potential jury. When you start at that fundamental level of the law, you really need someone who totally gets it. There are plenty of these excellent types of lawyers out there. Your only goal should be to find one of these lawyers that you feel that you can trust and that will work with you to achieve the kinds of results that you need in this circumstance. Protect your rights and your financial standing with a good lawyer who gets it.