[Blockchain Today Reporter Park Yohan] The US Internal Revenue Service (IRS) is preparing to seize shares of cryptocurrency holders who are struggling to repay their unpaid tax debt, and treat digital assets in the same way as other types of seizureable assets. I sent a strong message saying that I am doing it.
According to Cointelegraph reports, IRS deputy senior advisor Robert Wearing said in a virtual meeting hosted by the American Bar Association that the government is classifying digital assets as property. As a result, digital assets can be confiscated to cover unpaid unpaid taxes.
According to Bloomberg News, the IRS will seize the property and will follow the usual procedure of selling it and collecting it. Bitcoin and other cryptocurrencies are classified as property from the perspective of federal tax laws according to a 2014 notice published by the IRS.
“Virtual currency is considered an asset, and the general tax principles that apply to asset transactions also apply to virtual currency transactions,” the agency said.
The IRS can obtain cryptocurrency users’ data through exchanges such as Coinbase and Kraken, but once the assets are stored in a hardware wallet, it becomes much more difficult to prove ownership.
In addition to scalability issues, the tax-related issues of digital assets may be one of the reasons Bitcoin has not yet turned into a powerful medium of exchange. This is because whenever BTC is converted into cash, it is technically subject to taxation against the IRS and several tax agencies around the world.
contact@blockcast.cc
