{"id":288903,"date":"2021-05-13T13:54:55","date_gmt":"2021-05-13T17:54:55","guid":{"rendered":"https:\/\/insidebitcoins.com\/?p=288903"},"modified":"2021-05-13T13:54:55","modified_gmt":"2021-05-13T17:54:55","slug":"heres-how-the-irs-can-seize-your-bitcoin-crypto","status":"publish","type":"post","link":"https:\/\/insidebitcoins.com\/news\/heres-how-the-irs-can-seize-your-bitcoin-crypto","title":{"rendered":"Here\u2019s how the IRS can seize your Bitcoin and Crypto"},"content":{"rendered":"<p>Crypto holders who fail to pay their taxes might have their holdings confiscated by the IRS.<\/p>\n<p>The US Internal Revenue Agency has threatened to confiscate the <a href=\"https:\/\/insidebitcoins.com\/news\/russian-officials-will-now-have-to-disclose-their-crypto-holdings\">crypto holdings<\/a> of those who fail to pay their overdue taxes. By doing this, the IRS will be treating digital assets the same as other properties that can be seized in case of tax defaults.<\/p>\n<p>In a virtual conference hosted by the American Bar Association, the deputy chief counsel for the IRS, Robert Wearing, stated that the assets would be seized and used to repay outstanding tax debts.<\/p>\n<p>In his <a href=\"https:\/\/news.bloomberglaw.com\/tech-and-telecom-law\/irs-seizing-crypto-assets-to-pay-off-tax-debts-official-says\">own words<\/a>, Wearing stated, <em>\u201cThe IRS will seize that property and will attempt to follow its usual procedures to sell it and use it to satisfy collection,\u201d<\/em><\/p>\n<p>According to a 2014 notice issued by the IRS, virtual currencies will be treated the same way as property.<\/p>\n<h2>Challenge in proving crypto ownership: IRS<\/h2>\n<p>The IRS usually obtains details of crypto users from the exchange account. However, finding the number of holdings a user has can be difficult because some crypto holders hold their tokens in offline wallets.<\/p>\n<p>One of the main reasons <a href=\"https:\/\/insidebitcoins.com\/buy-cryptocurrency\/buy-bitcoin\">Bitcoin (BTC)<\/a> is slow in being adopted as a medium of exchange is taxation. Whenever Bitcoin is converted into cash, the IRS views the transaction as a taxable event posing a challenge.<\/p>\n<div class=\"su-button-center\"><a href=\"https:\/\/learn2.trade\/crypto-signals\" class=\"su-button su-button-style-3d\" style=\"color:#FFFFFF;background-color:#1d44bb;border-color:#183796;border-radius:0px;-moz-border-radius:0px;-webkit-border-radius:0px\" target=\"_self\"><span style=\"color:#FFFFFF;padding:0px 26px;font-size:20px;line-height:40px;border-color:#617dd0;border-radius:0px;-moz-border-radius:0px;-webkit-border-radius:0px;text-shadow:none;-moz-text-shadow:none;-webkit-text-shadow:none\"> Get Coin Signals!<\/span><\/a><\/div>\n<p>One of the main ways to avoid crypto taxation is by borrowing against your crypto holdings. The CEO of MicroStrategy, Michael Saylor, has advised investors to obtain loans that have been collateralised against their crypto holdings.<\/p>\n<h2>Taxation on ETFs<\/h2>\n<p>The IRS has been looking keenly in the crypto market to find ways of expanding its revenue streams. One of the <a href=\"https:\/\/insidebitcoins.com\/news\/goldman-sachs-reportedly-onboarding-clients-for-future-crypto-products\">crypto products<\/a> that the agency taxes is exchange-traded funds. Profits gained after ETFs are sold at a discount are taxed.<\/p>\n<p>Investors who hold ETFs for more than a year are taxed using long-term capital gain rates, which equates to a maximum of 23.8%, including a 3.8% Net Investment Income Tax. ETFs held for less than 12 months are taxed at the prevailing income rates.<\/p>\n<p>However, investing in ETFs has tax advantages because of two reasons. ETFs have lower capital gains than other investment vehicles, and tax is only paid when the ETF is sold.<\/p>\n<p>The IRS is not the only agency that is threatening to hold crypto holdings of tax defaulters. The city of Seoul in South Korea seized cryptocurrencies held by tax evaders.<\/p>\n<p style=\"text-align: center\"><strong>Get Free Crypto Signals \u2013 82% Win Rate!<\/strong><\/p>\n<div class=\"su-button-center\"><a href=\"https:\/\/learn2.trade\/crypto-signals\" class=\"su-button su-button-style-3d\" style=\"color:#FFFFFF;background-color:#1d44bb;border-color:#183796;border-radius:0px;-moz-border-radius:0px;-webkit-border-radius:0px\" target=\"_self\"><span style=\"color:#FFFFFF;padding:0px 26px;font-size:20px;line-height:40px;border-color:#617dd0;border-radius:0px;-moz-border-radius:0px;-webkit-border-radius:0px;text-shadow:none;-moz-text-shadow:none;-webkit-text-shadow:none\"> Get Coin Signals!<\/span><\/a><\/div>\n<p style=\"text-align: center\"><em>3 Free Crypto Signals Every Week \u2013 Full Technical Analysis<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"fin-excerpt\">Crypto holders who fail to pay their taxes might have their holdings confiscated by the IRS. The US Internal Revenue Agency has threatened to confiscate <a class=\"read-more-link\" href=\"https:\/\/insidebitcoins.com\/news\/heres-how-the-irs-can-seize-your-bitcoin-crypto\" title=\"Here\u2019s how the IRS can seize your Bitcoin and Crypto\">[&#8230;]<\/a><\/div>","protected":false},"author":1717,"featured_media":250243,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[7598,8572,7599,7893],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.0 (Yoast SEO v22.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Here\u2019s how the IRS can seize your Bitcoin and Crypto<\/title>\n<meta name=\"description\" content=\"The IRS will be treating digital assets the same as other property and can be seized in the case of tax defaults. Read more here.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/insidebitcoins.com\/wp-json\/wp\/v2\/posts\/288903\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Here\u2019s how the IRS can seize your Bitcoin and Crypto\" \/>\n<meta property=\"og:description\" content=\"The IRS will be treating digital assets the same as other property and can be seized in the case of tax defaults. 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