Thanks to a recent Yelp quotation request for tax preparation related to cryptocurrency, we were inspired to learn more about virtual currencies and their impact on taxes and government regulation.
From our research, we found new developments in government efforts to combat cybercrime related to cryptocurrency and feel more assured of digital data and virtual currency exchange security. As a result, we want to join what is now considered as the trending replacement of government-issued currency and the wave of the future.
Our research and education revealed that cryptocurrencies have had quite a turbulent history! Since the introduction of the concept of Bitcoin by alias Satoshi Nakamoto in 2007, Bitcoin and other cryptocurrencies and their investors have suffered data hacks, blockchain security breaches, digital wallet theft, connection with money laundering and the Dark Web, SEC regulation, FBI seizures, federal prosecution, and exchange shutdowns.
All things considered along with several recent developments related to cryptocurrency, have increased our confidence that trusting cryptocurrency for payment is the way to go.
The latest IRS news release posted November 18th, 2021 included the annual security report of the IRS Criminal Investigation Division of the US Treasury. The report details case studies of several cyber criminals (young guys, 26 to 37!) who were caught by the IRS Criminal Investigation Division and Cyber Crime Unit in the last few years. It also explains their increasing enforcement efforts through launch of a new data center in Northern Virginia (see p. 8).
The IRS, empowered by the American Rescue Plan Act signed into law as of March of this year, which lowers the reporting threshold for 1099-K transactions from $20,000 in transactions to $600 with no minimum number of transactions as of the start of next year (see Section 9674).
Data security is critical for us. We must assure our clients that their financial and tax information is safe in our care. These efforts by the government make us feel more assured that our client’s financial information when paying with cryptocurrency is also safe.
We believe that these efforts help ensure the legitimacy of utilizing cryptocurrency as payment for our services and is fast becoming the way to go for any existing and new businesses now and into the future.
It allows us to set an example:
For our nonprofits, considering accepting cryptocurrency as donations or for charitable programs and services is a great benefit to donors who have experienced the cryptocurrency market boom in the last few years. This allows you to benefit from the current market exchange rate for the currency or to hold to it as an investment and utilize the gains upon future disposal.
For our small business startups, accepting cryptocurrency as payment allows the over 16% of US adult investors, according to Pew Research as of November 2021, to use their cryptocurrency to pay for your goods and services. During COVID-19, many startups utilize modern tech to develop a viable and consistent management foundation and structure. Why not utilize modern payment technology that is quickly become the source for effective and safe trading and currency exchange for all types of personal and business transactions!
For individuals and small business taxpayers, donating to qualified charitable organizations using cryptocurrency allows you to utilize the charitable deduction, based on certain income limits, for up to 50% of the fair market value of the currency at the time of the donation to qualified charities and retain the unused balance for 5 year for use on a future returns.
Before you decide if you want to accept cryptocurrency as payment, do your research. Make sure that you are exchanging with a recognized SEC regulated cryptocurrency exchange using blockchain with proven data security. We are using Coinbase, a trusted cryptocurrency service provider that allows our clients to securely use their cryptocurrency for payment for our services.
As of the date of this posting, we are happy to offer our clients cryptocurrency as another payment option to receive our services. And, we will continue to keep you updated with new government enforcement efforts. Go crypto!
Select one of our service packages that meets your tax needs and use the “Now! Buy with Crypto” link.*
*As of 7/8/2024, we no longer offer payment by Crypto.
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