Understanding the Need for Tax Amnesty

In recent discussions, we have made a compelling case for implementing a tax amnesty to help crypto traders who have yet to come forward.

These conversations have included high-level talks with the Taxpayer Advocate's office, a key entity in tax policy and enforcement, highlighting a common struggle: How can we propose an effective tax amnesty?

The IRS’s Stance

The complication lies with the IRS, which has provided significant time for crypto traders to report their gains.

They've been clear and have not created substantial roadblocks for filing tax returns.

Up until now, the IRS hasn't enforced a stringent crackdown, which typically accompanies an amnesty.

Therefore, the expectation of an amnesty program seems unlikely.

Perception of Crypto Traders

From the perspective of the IRS, crypto traders are viewed as high-income individuals.

Interestingly, former IRS Commissioner, Charles Rettig, suggested that the crypto market could owe up to half a trillion dollars in unpaid taxes.

These substantial figures explain why the IRS is hesitant to ease up on enforcement and allow for tax amnesty.

The Anticipated Crackdown

The IRS is expected to focus heavily on high-income individuals, particularly those with over $400,000 in total positive income, including many crypto traders.

We anticipate a significant increase in criminal enforcement and audits.

This focus will likely trigger a rush of traders trying to comply once they realize the severe consequences of not doing so.

Signs of an Enforcing Crackdown

Watch for an increase in news releases from the IRS and the Justice Department to determine when the crackdown begins.

Weekly announcements will likely detail individuals pleading guilty to charges or facing penalties from tax court rulings.

This news will be a lagging indicator as the actual enforcement began 6 to 12 months prior.  

Conclusion

A significant crackdown is expected to commence after a new president takes office to avoid turning the issue into a political debate. 

The IRS and other authorities appear to be preparing for a substantial enforcement period.

At CryptoTaxAudit, we provide expert guidance and educational resources tailored to your investment needs. 

Stay ahead of changing policies and ensure your financial decisions are well-informed and strategic.

Don’t miss out—schedule a call with us today to equip yourself with the essential knowledge to manage crypto tax implications effectively. Protect your financial future by acting now!

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