Cryptocurrency News Today: Despite Trump’s anti-crypto tweets, the IRS wants its cut of virtual currency profits

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Cryptocurrency News Today: Despite Trump’s anti-crypto tweets, the IRS wants its cut of virtual currency profits
Mo virtual money, mo taxes.
Mo virtual money, mo taxes.

Image: Getty Images/iStockphoto

By Rachel Kraus

Cryptocurrency might be a challenge to the primacy of the U.S. dollar, but that’s not stopping the Internal Revenue Service from wanting a piece of the action.

The IRS announced Friday that it was sending letters to 10,000 Cryptocurrency holders informing them that they needed to report, and pay taxes on, their crypto transactions and capital gains.

“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties,” Chuck Rettig, IRS Commissioner, said in a statement. “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 letters don’t mean that the government is recognizing Bitcoin or other virtual currencies as a form of money. Rather, people are making money buying and selling Cryptocurrency as a commodity. And if people are making money by trading and acquiring something — even a virtual something — the IRS sees that as taxable income.

That isn’t a surprising position, but it does stand in contrast to some highly public inflammatory statements President Trump made about Cryptocurrency recently.

After Facebook announced the creation of its virtual money, Libra, Trump sent out a tweetstorm denouncing the move, and Cryptocurrency as a whole.

“I am not a fan of Bitcoin and other Cryptocurren

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