US Tax Filing Service Says 0.04% Of Users Reported Crypto To IRS As Deadline Nears
As the last day to file your taxes in the US approaches, April 17, the Credit Karma Tax platform repeated to reporters that less than 100 people have reported capital gains from crypto investments out of the 250,000 most recent tax filers, CNBC reports today, April 13.
In February 2018, at the beginning of tax season, Credit Karma reported the very same numbers to reporters, 100 out of 250K, or 0.04 percent of tax filers reporting gains on crypto. In 2015, the Internal Revenue Service (IRS) reported that only 802 people in total had crypto gains and losses in their tax filings.
The IRS has provided guidance on Bitcoin (BTC) taxation since March 2014, stating that is treats cryptocurrency as property and the purchase, sale, trade, and mining of crypto as taxable events.
The general manager of Credit Karma Tax, Jagjit Chawla, told CNBC that there is a “good chance that the perceived complexities of reporting cryptocurrency gains are pushing filers to wait until the very last minute,” adding a pitch for the service about how Credit Karma eases the process.
Fundstrat’s Tom Lee had predicted earlier this month that the crypto market’s dip since the new year may have been caused by a crypto sell off by investors that needed fiat on hand in order to pay capital gains tax.
Elizabeth Crouse, a partner at law firm K&L Gates, told CNBC that she guessed there is a fair amount of underreporting, citing the reason as risk-taking behavior:
“Most of the people in the cryptocurrency world tend to have a pretty high risk tolerance."
With only two days to go until tax day, the crypto markets have experienced a relatively high period of growth over a short term, which Lee attributes to a possible end of selling crypto to pay taxes.