FILE PHOTO: in A sign that the virtual currency Bitcoin has been given and placed on a monitor to display binary numbers in the illustration, the picture, December 8, 2017. REUTERS/dado Ruvic/Image/File Photo
WASHINGTON (Reuters) – The U.S. Internal Revenue Service said on Friday it was sending thousands of letters to taxpayers who failed to report virtual currency transactions, saying that they owe in taxes.
The IRS has said that it is planning to send more than 10,000 letters sent to taxpayers, in an effort that began early in July and will continue through the end of August.
“Taxpayers who have not properly reported on the federal income tax consequences of virtual currency transactions when required, shall be liable for the tax, penalties and interest,” the agency said in a statement.
“The taxpayers should take these letters extremely seriously, the review of the tax returns and, if necessary, change the historical returns and pay back taxes, interest and penalties.”
In July, 2018, the TAX and customs administration also announced that it would initiate a series of compliance campaigns for the U.S. taxpayer to “collect the tax on its worldwide income from all sources, including transactions involving the virtual currency.
The IRS has said that he thinks cryptocurrencies such as bitcoin is property for federal income tax purposes, which means that the gain or loss on the sale will generally be reported as capital gains or losses.
Reporting from Katanga Johnson; editing by Jonathan Oatis