The U.S. Internal Revenue Service (IRS) is again sending warning notices called CP2000 to the crypto investors. These notices have been sent to the investors, who owe taxes on gains from crypto holdings. It is revealed that the IRS has also sent these letters to the crypto users in 2019 as well. This has been reported by CryptoTrader.tax, as they have been receiving a lot of queries regarding CP2000 letters. The firm clarified that the IRS sends CP2000 notices to those individuals whose income-related information is different on tax returns from what it is on the IRS file. Tax Experts Believes a Mistake as IRS Sends CP2000 Notices As the IRS sends CP2000 notices to the crypto investors, a lot of tax experts believe that there might be some mistake. They have also mentioned that the main problem is coming due to some exchanges like Coinbase are using form 1099K to report the data of the users. They should instead use the 1099 or 1099B form to do the same. According to the reports, the IRS has already sent CP2000 notices to dozens of investors. This has been done in a couple of days and is still going on. David Kemmerer, CEO of CryptoTrader.tax, has also made comments on this matter, he stated: “1099-K form does not make sense in the context of cryptocurrency exchanges, and yet, many prominent exchanges like Coinbase have decided it is 1099 they are going to use to report customer earnings information.” 1099K Form Does Not Represent Gains or Losses Kemmerer while explaining about the 1099K form has said that the main problem is that this form does not represent any kind of gains or losses. It reports the gross proceeds that included all the transactions to the IRS. This is the reason why there is a huge difference between the information on tax returns and IRS files. Hence, the IRS has sent these CP2000 notices to the crypto investors.
The post IRS Sends CP2000 Notices as Warning to Crypto Investors appeared first on Cryptoknowmics-Crypto News and Media Platform.
from Live Crypto News – Cryptoknowmics-Crypto News and Media Platform
