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Cryptocurrency Tax Crackdown Raises Specter of Legal Challenges

June 10, 2021, 8:45 AM

Legal battles over the tax treatment and reporting burdens for cryptocurrency could be on the rise as the IRS and Treasury try to stop evasion and money-laundering in the industry.

In recent years, the IRS has repeatedly signaled that tax compliance for cryptocurrency users is a high and growing priority. Commissioner Charles Rettig told lawmakers in April that cryptocurrency tax underpayment is a key contributor to the gap between what the federal government is owed and what it collects, an amount he said could total more than $1 trillion annually.

Neither the IRS nor the Financial Crimes Enforcement ...