Cryptocurrency users have a few interesting habits when it comes to dealing with taxes. This has caused the IRS to launch official investigations involving cryptocurrency exchanges. Additionally, it seems the agency has co-founded the J5 initiative, or Joint Chiefs of Global Tax Enforcement.
The J5 Initiative Is Born
Various countries around the world have introduced official taxation guidelines for Bitcoin and other cryptocurrencies. This is especially true in the United States, as the IRS has been cracking down on anyone not paying taxes despite holding a cryptocurrency portfolio. However, these investigations are not necessarily going according to plan as of right now.
More specifically, the IRS has acknowledged that a more widespread operation needs to be created to ensure all cryptocurrency users pay their taxes. The IRS has partnered with four other tax agencies in Australia, the Netherlands, Canada, and the United Kingdom. Their joint mission is to crack down on any users who fail to pay taxes on their cryptocurrency holdings.
Taking an international approach to dealing with cryptocurrency taxes and criminal activity is a big milestone for this booming industry. After all, the cryptocurrency industry needs more legitimacy in any way it can get it, and this effort is designed to make this industry look more genuine and legitimate. Although not everyone will agree that the J5 initiative is a positive development, its long-term effects will be positive.
All five agencies will share information and conduct cryptocurrency crime-related investigations. Their main goal is to address tax concerns related to Bitcoin and altcoins. Its second purpose is ending cryptocurrency-related crime once and for all. Whether or not the J5 will be successful in this regard remains to be determined. Tackling these issues is no easy feat.
The new era of cryptocurrencies poses many new opportunities and risks for consumers and government agencies alike. Addressing any concerns affecting this particular industry is not going to happen overnight. At the same time, it’s good to see the IRS acknowledge the traditional approach will not be sufficient to keep a lid on cryptocurrency activity. The new J5 initiative is designed to address all of these concerns.
More importantly, it appears the J5 group wants to focus on being forward-thinking at all times. This further confirms there is no intention in any of these countries to curb cryptocurrency activity unless users conduct illegal actions in the process. In the long run, this venture is a net plus for the cryptocurrency industry, and it should be treated as such.