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Hey, it's Michael Rozbruch, creator of the Tax Resolution Domination System and ToolKit and also the Client Care Package System and Toolkit.

And today I want to talk to you about cryptocurrency and the IRS because buried in the $1.2 trillion infrastructure bill that was passed into law on November 15th, 2021 is a paragraph that basically states that exchanges now, cryptocurrency exchanges are going to be required to give your clients a 1099 beginning in 2023, just like brokerage houses do.

Now, here's the thing.

If the cryptocurrency exchange does not have a W9 on behalf of your client with their Social Security number, the exchange is mandated to withhold 24 percent withholding and pay that money over to the IRS.

Like the IRS has just implemented about a year now, 400 special agents, 400 special revenue officers are dedicated to going after cryptocurrency exchanges and taxpayers who are not reporting their gains in cryptocurrency, in all the bitcoin, in all the other coins.

Now there's also a question this year on form 1040 that basically asks a yes or no question. The question is, "did you have virtual currency transactions during 2021?"

Because when 2022 rolls around, the IRS is going to use that information because remember your client signs their 1040 under penalties of perjury so that they can go after your clients if they don't answer that question correctly.

And the fines and penalties are stiff for cryptocurrency transactions not being reported. Not only civilly, but the IRS can go after your clients on a criminal basis, too, if they don't report all their cryptocurrency transactions.

So remember that beginning in 2023, when you file the 2022 tax returns, your clients need to provide you with the 1099 they got from the exchange.

And if they don't have that, the exchanges are required to withhold 24 percent of those withholding taxes and pay that over to the IRS.

So I hope you like this quick little video and we'll see on the next one. www.rozstrategies.com/live-training