Connect with us

Blockchain

IRS Stepping Up Cryptocurrency Enforcement Efforts

Published

on

The IRS has confirmed that it has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly. In the announcement, IRS Commissioner Chuck Rettig says that “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 IRS identified the taxpayers receiving these letters through various ongoing IRS compliance efforts, likely including customer information that the IRS received last year after successfully enforcing a John Doe summons against Coinbase. The IRS has said that it expects more than 10,000 taxpayers will receive these letters by the end of August.

Taxpayers will receive one of three variations of the letter: Letter 6174, Letter 6174-A, or Letter 6173. Letter 6174 is a “soft notice” that notifies the taxpayer that the IRS is aware that they have or had one or more accounts containing virtual currency, and says that taxpayers should file amended or delinquent returns if they believe they have not accurately reported virtual currency transactions on their tax returns. Letter 6174-A is similar to Letter 6174 but also states that the IRS has information that the taxpayer “may not have properly reported your transactions involving virtual currencies.” Letter 6173 goes another step further, directing taxpayers to respond to the letter either by filing amended or delinquent returns or by providing a written explanation of the actions they have taken to become compliant with their US tax obligations. All three letter variations provide general educational information about taxpayers’ obligations to report virtual currency transactions.

At the same time, the IRS also appears to be stepping up criminal enforcement efforts. On July 19, Don Fort, Chief of the IRS’s Criminal Investigation Division, spoke about the IRS’s criminal enforcement efforts regarding cryptocurrencies, at the RJS Law Tax Controversy Institute in San Diego. Mr. Fort reportedly told the audience that the division is building a number of cryptocurrency-related criminal tax cases, and that details about those cases may soon become public. Earlier this month, Tax Notes published a detailed presentation prepared by the Criminal Investigation Division regarding the use of cryptocurrencies in cyber crimes.

Taxpayers who have received a letter from the IRS may wish to consult a tax advisor to ensure that they have complied with their tax obligations or to determine the best way to respond to the letter or come into compliance.

Source: https://www.steptoeblockchainblog.com/2019/07/irs-stepping-up-cryptocurrency-enforcement-efforts/

Blockchain

Franklin Templeton Join Series A For Institutional Bitcoin Custody Provider Curv

Published

on

Curv, an institutional crypto asset custody provider, today announced that global investment firm Franklin Templeton and fintech-focused venture capital firm Illuminante Financial Management have joined its Series A funding round — which already included CommerzVentures, Coinbase, Digital Currency Group, Team8 and Digital Garage.

“Curv is driving traditional institutional and crypto native demand for digital assets through multi-party computation (MPC) security technology, a critical requirement to safely transfer, store and manage any digital asset on any blockchain or DLT,” according to a press release shared with Bitcoin Magazine. “Their solution is used by dozens of institutions across the globe, including Franklin Templeton, which plans to leverage Curv’s infrastructure to expand into the burgeoning digital asset market.”

  • Curv uses a cloud-based wallet to manage digital assets, including bitcoin, on behalf of institutions. It also insures up to $50 million of digital assets for clients
  • The release credited a recent announcement from the U.S. Office of the Comptroller of the Currency allowing nationally-chartered banks to custody cryptocurrency for clients and similar announcements from other regulatory bodies with encouraging traditional financial institutions to collaborate with Curv on managing crypto assets
  • “The addition of Franklin Templeton is a barometer of the traditional industry’s shift into digital assets and a broader desire to bring public blockchain-based offerings to market,” Curv CEO Itay Malinger said, per the release.

Source: https://bitcoinmagazine.com/articles/franklin-templeton-join-series-a-for-institutional-bitcoin-custody-provider-curv?utm_source=rss&utm_medium=rss&utm_campaign=franklin-templeton-join-series-a-for-institutional-bitcoin-custody-provider-curv

Continue Reading

Blockchain

The Good and The Bad About Cryptocurrency on PayPal

Published

on

Global payments provider PayPal has almost 350 million users and 26 million vendors in its network so the introduction of crypto payments has been widely lauded as bullish for the industry.

Crypto markets surged and Bitcoin cranked to a new 2020 high of $13,200 during the hours after the news broke. Many industry experts have praised the move as a great thing for Bitcoin and the entire crypto ecosystem, but all might not be what it seems.

Enabling decentralized digital assets on a highly centralized platform with astronomical fees may not be the best combination, and here is why.

No Crypto Withdrawals, Big Fees

Firstly, PayPal will not allow crypto assets to be withdrawn to external wallets, so essentially once they’re on the platform PayPal can set whatever price it wants for users needing to convert back to fiat.

You Might Also Like:

If anyone has used PayPal to change currencies or send money to an account in another country they’ll be painfully aware of the forex spread which can be as much as 8% depending on the currency being converted. OKCoin COO Jason Lau pointed out the pain that may be in store regarding the fees.

Additionally, PayPal will not allow crypto transfers between different accounts as observed by lawyer Jake Chervinsky;

Essentially, PayPal has mimicked the purchasing of crypto assets on trading platforms such as Robinhood, offering users exposure to the asset but preventing them from owning it independently. Chervinsky added if you can’t make withdrawals to self-custody, and don’t hold your own keys, is it even Bitcoin?

The Taxman Cometh

The whole setup could also open a huge can of worms when it comes to taxes. PayPal is only offering crypto services to U.S. account holders initially, and America happens to have some of the harshest tax regulations on the planet.

The U.S. Internal Revenue Service (IRS), classifies crypto assets such as Bitcoin as property, not currencies, therefore they are subject to capital gains taxes. The means that PayPal users buying, selling, or spending crypto will be generating taxable events that need to be reported.

If a user buys a smartphone using Bitcoin, for example, they would need to declare the price they obtained the BTC at, and the price it was when they sold it for the item, paying taxes on any gains it may have made in addition to VAT on any items purchased.

The documentation for reporting is a minefield and PayPal has already stated it is down to the individual, not them, to complete tax returns.

“It is your responsibility to determine what taxes, if any, apply to transactions you make using your Cryptocurrencies Hub.”

The good news is that PayPal may introduce the concept of cryptocurrency to millions of new users, but the drawbacks will probably prevent them from using the platform in the long run.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).


Source: https://cryptopotato.com/the-good-and-the-bad-about-cryptocurrency-on-paypal/

Continue Reading

Blockchain

Exaion (EDF Group) To Become Corporate Baker On Tezos

Published

on

  • Exaion, a subsidiary of the French multinational electric utility company EDF Group, will join the Tezos ecosystem as a corporate baker.
  • The press release shared with CryptoPotato disclosed that Exaion is EDF’s arm specializing in blockchain solutions and high-performance cloud computing. The company aims to utilize distributed ledger technology to develop solutions to minimize the carbon footprint of its business and its customers.
  • Tezos is a third-generation decentralized blockchain project creating and managing distributed applications. By providing an innovative liquid proof-of-stake (LPoS) consensus algorithm, Tezos technology reduces the energy required for its stability.
  • Exaion CEO and co-founder Fatih Balyeli asserted that choosing Tezos “came naturally” due to the aforementioned reasons. He added that “baking on Tezos allows us to significantly reduce our energy consumption and is in line with our sustainable development policy while keeping a high-quality digital offering.”
  • The name “bakers” represent block creators. They have the same role as “miners” in other blockchain projects based on proof-of-work consensus algorithms such as Bitcoin.
  • Each block is created by a randomly selected baker, endorsed by other bakers, and validated by the rest of the network. The primary difference with PoW comes as bakers lock up their XTZ tokens as collateral to ensure that the blocks are validated correctly. This incentivize network participation and enhances network security.
SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).


Source: https://cryptopotato.com/exaion-edf-group-to-become-corporate-baker-on-tezos/

Continue Reading

Trending