IRS cracking down on cryptocurrency new form asks about financial interest in virtual currency

The IRS published a new tax form containing a question about cryptocurrency on Thursday. The Schedule 1 form is part of the 1040 tax form for U.S. taxpayers to declare “Additional Income and Adjustments to Income.” The IRS first unveiled the draft of this form in October, as previously reported. The form is now finalized and posted on the IRS website for use in filing 2019 tax returns. Form 1040 is used by over 152 million U.S. tax filers. The first question on the new Schedule 1 reads:

At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?

”The IRS has been increasing its efforts to find and tax crypto owners. The agency’s Criminal Investigation Annual Report 2019 released last week outlines its efforts and progress in finding and convicting crypto tax evaders. The IRS believes that it has the tools and ability to find crypto tax evaders. Cyber criminals “now deal in cryptocurrency, again thinking this will make them anonymous, but our agents have once again proved that there is nowhere to hide. We will not stop in our pursuit,” the report reads. In July, the tax agency sent more than 10,000 letters to crypto users reminding them of their tax obligations.