IRS Will Seize Crypto Assets on Failure to Pay US Taxes: Official

Crypto is treated by the IRS as property for U.S. tax purposes and can be seized in the same way, an official said.

May 13, 2021 at 11:00 a.m. UTC
Updated Sep 14, 2021 at 12:54 p.m. UTC

The U.S. Internal Revenue Service (IRS) could seize people’s crypto assets to settle unpaid taxes, an agency official said.

  • Robert Wearing, deputy associate chief counsel at the IRS, told a virtual conference Wednesday that crypto can be seized in the event of failure to pay taxes, just like other property.
  • This is in line with a 2014 IRS notice that crypto will be treated as property, not currency, for tax purposes.
  • “Bottom line: The IRS will seize that property and will attempt to follow its usual procedures to sell it and use it to satisfy collection,” Wearing said, according to a Bloomberg report.
  • The IRS recently contracted with crypto tax service provider TaxBit to assist with auditing of crypto transactions to verify the correct reporting of taxes by high-volume traders. 

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