US tax preparation service Credit Karma has found that fewer than 100 of the 250,000 people who have filed tax return forms so far in 2018 made a note of any cryptocurrency gains.
It may look like business as usual from the perspective of those who believe that very few Americans are actually invested in cryptocurrency assets. However, a survey conducted by Qualtrics and Credit Karma established that almost 57% of the 2,000 respondents recorded gains from cryptocurrencies.
So far, it looks like most US citizens won’t be including their crypto profits in tax forms.
Perhaps it is too early to say if the Bitcoin fever in the US will lead to tax evasion. After all, the tax filing deadline is still two months away.
Credit Karma Tax general manager Jagjit Chawla said this was certainly a possibility since most Americans who find themselves in more complicated tax situations tend to file closer to the deadline.
“However, given the popularity of bitcoin and cryptocurrencies in 2017, we’d expect more people to be reporting,” he added.
Tax evasion is clearly not out of the question for people invested in a currency that until now was highly anonymized and would create problems for the authorities to track.
This is probably why the IRS has assembled a task force to comb through blockchains and try to find people who shirk paying taxes on their gains.
Exactly how they will catch these people is a mystery, however, as blockchains like Monero’s and Zcash’s present an almost insurmountable challenge.
Even Bitcoin’s blockchain poses a significant challenge (albeit not impossible) in uncovering the identities of coin holders.
In the end, we might just end up seeing a significant number of Americans get away with tax evasion, especially if they invested in some of the lesser-known and more privacy-oriented cryptocurrencies.