H&R Block, the US-based accounting firm, has started operating as a middle-man between users of crypto and the Internal Revenue Service (IRS) after the agency started forwarding letters to crypto traders who did not disclose their income and complete tax obligation.
H&R Block has unveiled a new facility for people who are involved in crypto currency transactions, particularly offering advice regarding tax filing of crypto gains and losses.
The IRS originally forwarded letters to 10,000 crypto investors, asking a few of them to modify and resubmit their tax documents, while demanding others to pay taxes with or without interest and penalties.
Chuck Rettig, IRS Commissioner, said:
“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. 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 IRS collects information from cryptocurrency exchanges and matches it with 1099-K report of traders. If the reports do not match, the IRS forwards CP2000 notice to traders, detailing the amount a trader is anticipated to pay within 30 calendar days.
H&R Block therefore partnered other major professional services firms who intend to address cryptocurrency auditing problems. In June, Big Four firm PwC added a fresh tool to its Halo auditing suite. The tool can be used to “provide assurance services for entities engaging in cryptocurrency transactions.”
In March, Ernst & Young unveiled a tool built to enhance accounting and tax calculations for cryptocurrency transactions by institutional clients that have cryptos on their balance sheets and low volume traders of crypto assets.
