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IRS Commissioner Charles Rettig recently announced an increase in digital asset tax investigations. According to the commissioner, the IRS has seen an uptick in the number of tax investigations involving digital assets, which include cryptocurrencies such as Bitcoin. This is in line with the agency’s ongoing efforts to crack down on crypto tax avoidance. Commissioner Rettig stated, “We are seeing an increase in the number of taxpayers with digital asset activity and remain focused on proper tax compliance in this area.” The IRS has released a series of guidance documents and frequently asked questions in order to help educate taxpayers on how to properly report cryptocurrency activity on their tax returns. The agency is also planning to issue new regulatory guidance on the taxing implications of cryptocurrency transactions in 2021.
