How to navigate cryptocurrency tax implications amidst the CPA shortage
Cryptocurrency is a hot topic worldwide, especially with prices of Bitcoin (BTC), Ethereum (ETH) and other cryptocurrencies hitting higher thresholds and resulting in another banner year for investors. While the earnings look good on paper, one factor is often left to consider –– that is, crypto taxes.
It is not uncommon for traders to take advantage of the constant fluctuations, buy the dip, sell the uptrend, and repeat it frequently. Unfortunately, each transaction is considered a taxable event, making the conversation about cryptocurrency taxes a daunting one.
The impending crackdown on cryptocurrency taxation only spurs on the need to start the conversation. This crackdown is far from recent, with 2021 headlines of an IRS chief stating the country was losing trillions of dollars in unpaid taxes each year, with a significant portion being attributed to the crypto market. For this reason, several subpoenas currently exist against Coinbase, Kraken, and Poloniex in the U.S., which obligates these exchanges to share the information with the IRS.
Events like this have since fuelled more recent announcements of the IRS seizing billions of dollars in cryptocurrency that may be related to tax fraud. While some of these actions to evade paying taxes seem extreme, especially in comparison to one’s own calculation errors, it is worth noting that it is always the ones intentionally avoiding taxes that may be affected by the imposing crackdown.
The IRS has recognized that more investors are now taking part in the digital currency market than ever before, an action that is one part hype and many parts attributed to the amount of money the government gave out throughout the COVID-19 pandemic. With more discretionary income in the hands
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