The United States Internal Revenue Service announced today that it is now in the process of sending warning letters to more than 10,000 U.S. taxpayers who trade cryptocurrency. The agency revealed that it began sending those letters last week and plans to complete the process by the end of next month, Yahoo Finance reports.
The agency is warning those taxpayers that some of them may have failed to properly report income earned via cryptocurrency trading and instructs them to review their tax filings and amend returns to correct any errors. According to IRS Commissioner Chuck Rettig:
“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties.
The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”
The tax agency has come under fire from some lawmakers, who have urged it to provide updated guidance to help taxpayers better understand how to include cryptocurrency earnings on their tax forms. In today’s statement, the agency noted taxpayer education will continue to be part of its broader strategy to ensure compliance.