Regulatory Series on Cryptocurrencies: Take a Glance at Crypto Tax Evaders, International Taxman and IRS Approach

The US treasury secretary Steven Mnuchin voiced at the G20 summit in June 2018, seeking governments across the globe perspectives un unison to prevent anonymous cryptocurrencies activities from becoming the next "Swiss bank account." 

The tax officials from Australia, the US, Britain, the Netherlands, and Canada have formed a “J5” collaborative group now investigating 60 “lines of inquiry” regarding international tax evasion using cryptocurrencies.

In addition, during the course of the tax filing season, the US authorities, Internal Revenue Service (IRS) has been striving with all ways they can with an intention of simplifying the process of filing tax returns. Tax liability is an obligation and mandatory which is a method of funding governments to deliver better services in the interest of the public.

But in the recent times, the pioneer cryptocurrency (Bitcoin) and its counterparts sensed eye-catchy market-capitalization growth amid topsy-turvy trend, that puzzles quite a few investors and their CPAs struggling with uncertainties (as deadline nears, April 15thfor filing taxes in the United States) and surprises during tax season owing to many reasons (predominantly, lack of clarity in the regulatory framework). 

Some returns were given an extension, awaiting further guidance from the IRS, while other taxpayers found themselves faced with an unexpectedly large tax bill as a result of misconceptions surrounding how these transactions are taxed.

The Representatives in the United States House of Representatives have reinforced the Token Taxonomy Act. The bill would exclude cryptocurrency from being classified as a security.

The international cooperation and information sharing especially while functioning beyond borders and between different authorities involving cryptocurrency and cybercrime activities drives the formation of J5, which was formed by tax agency chiefs from Australia, Canada, the UK, America, and the Netherlands.

The J5 has been established in response to the OECD nation’s call to action for countries to do more to tackle the enablers of tax crime. The J5 works collaboratively with the OECD and other countries and organizations where appropriate.

Diane Lebouthillier, Canadian minister of national revenue stated that "Combating tax evasion across international borders requires partner nations to work together effectively and to understand the available data and tools."

Currency Strength Index: FxWirePro's hourly BTC spot index is flashing at 96 levels (which is bullish), USD is at -107 (highly bearish), while articulating (at 12:06 GMT). 

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