The stunning rise in the value of Bitcoin, along with the myriad of cryptocurrencies, is surely one of the biggest financial stories of the 21st century. What started out as a mere curiosity and niche project for programmers and geeks has quickly blossomed into a full-fledged financial asset, and an increasingly popular one at that.

Cryptocurrency is on a Rise

For early adopters, the financial returns have been simply mind-boggling. You may have heard about the generation of Bitcoin millionaires, and there are plenty of those newly rich investors to go around.

Therefore, with the rapid rise and relative anonymity of Bitcoin transactions, it was only a matter of time before the IRS caught on to the action. The tax agency has caught on and caught up in a big way. After years of taking a hands-off approach to cryptocurrency investments, the IRS is now paying close attention – and requesting the real-world identities of those supposedly anonymous buyers and sellers.

Every investor in cryptocurrency should be aware of their potential tax liability. The problem could be even more acute for early adopters – the very investors who have profited the most from this unique form of digital payment.

The IRS on Crypto

As with all things tax, the Internal Revenue Service is likely to start where the big money is, and the tax agency has increasingly set their sights on early adopters. If you were prescient enough to buy into the promise of Bitcoin and other cryptocurrencies when everyone else was looking the other way, it may be time to settle with the IRS.

For early adopters of cryptocurrencies like Bitcoin, a little proactivity could go a long way. The IRS has already requested records from Coinbase and other big cryptocurrency exchanges. Therefore, it’s only a matter of time before they catch up to you and your profits.

For now, the tax agency claims it has requested information on only the largest accounts. Nevertheless, the IRS may expand its scope in the future. If you have booked your Bitcoin profits and want to settle with the IRS, contacting a tax resolution agency now could save you a lot of money – and potentially a lot of grief.

The Importance of Tax Resolution Services

There are many reasons for early adopters of Bitcoin and other cryptocurrencies to work with a tax resolution service, starting with the complexity of reporting profits in digital currency. The IRS is still fairly new to regulating and taxing cryptocurrency, and there has been a lot of confusion and misinformation over how profits are taxed and how people are supposed to pay.

Regardless, now is the time to file your taxes if you haven’t reported your crypto earnings or filed your taxes for the past few years. By working with a tax resolution expert, you will gain access to a world of expertise. You can draw on that knowledge to accurately report how much cryptocurrency you have purchased, how many coins you have used and how much you have gained or lost on each transaction.

Proper accounting for cryptocurrency transactions is very important because it could impact your tax bill and future taxes and penalties. According to the IRS, holders, and users of cryptocurrencies have been responsible for reporting their gains all along. Failing to report cryptocurrency transactions could mean big penalties and lots of back interest.

The Bottom Line

A tax resolution specialist will be able to guide you through one of the most complicated tax situations in many years. The very complexity of the cryptocurrency market makes navigating the tax consequences very difficult. It never hurts to have some expert assistance in your corner. Do yourself a favor and come clean now. The IRS has finally caught on to the cryptocurrency revolution. The IRS is making up for the lost time by making the lives of early adopters a lot more difficult.

Ultimate Tax Relief, located in Bronx NY is a tax resolution company equipped to navigate the IRS maze. We’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. www.ultimatetax-relief.net