IRS Warns About Hotmail Scam And Potential Virtual Currency Taxation
As we barrel toward the end of the year and shoot headlong into tax season, the IRS has a couple of warnings for taxpayers and tax professionals alike.
These are just two items as we wait and see if there are going to be any bigger changes if a new tax bill is passed.
Taxing Virtual Currency
First of all, if you decided to explore the investment opportunity presented by Bitcoin and other virtual currencies, the IRS may be hitting you up for taxes this coming tax season. The IRS is stepping up enforcement as they see owners experiencing the thrill of record high values.
According to accountingtoday.com, “Last week, a court ordered Coinbase to disclose information pertaining to more than 14,000 of its customers who have engaged in transactions involving bitcoin, and possibly other virtual currency transactions.”
Coinbase defines itself as “a secure online platform for buying, selling, transferring, and storing digital currency.” Specifically, Coinbase provides users with the ability to create a digital wallet to store digital currency, including bitcoin, Ethereum and litecoin. As is website states, “Coinbase has been used in the exchange of more than $50 billion, supports 32 countries and has served more than 10 million customers.”
Accountingtoday.com reported that, “The court issued its ruling after more than a year of litigation and following the IRS’s decision to significantly narrow the scope of its summons. Originally, the IRS sought information pertaining to any United States person who had conducted a virtual currency transaction at any time during 2013 through 2015. The summons enforced by the court is limited to information regarding accounts “with at least the equivalent of $20,000 in any one transaction (buy, sell, send, or receive) in any one year during the 2013-2015 period.”
On another note, the Internal Revenue Service recently issued a warning to both, taxpayers and tax professionals about a new email scam targeting Hotmail users in which the thieves try to steal personal and financial information.
This information also comes from Accountingtoday.com and describes the phishing email as having a subject line saying, “Internal Revenue Service Email No. XXXX | We’re processing your request soon | TXXXXXX-XXXXXXXX”. Then, according to the article, “The email takes taxpayers to sign into a bogus Microsoft web page asking for their personal and financial information.”
To date, the IRS has received more than 900 complaints about the new scam that appears to exclusively target Hotmail users. The suspect websites associated with the scheme have been shut down, but taxpayers should be on the lookout for similar scams.
Professionals and individuals who get suspicious-looking emails supposedly from the IRS should send it to firstname.lastname@example.org and then delete it. Do not open the email. The IRS doesn’t initiate contact with taxpayers via email and they do not ask for any personal or financial information.
It’s year-end and criminals know most Americans are involved in holiday festivities, which means their guard is down. Don’t become snared by the scams. Stay alert and keep the holidays bright.