Bitcoin traders in the US may have to brace up for new guidelines on the taxation of their earnings, as the Internal Revenue Services (IRS) has released a new schedule for compliance, exemptions and enforcement of tax on cryptocurrency earnings.
Under the new schedule released recently, the IRS has drafted new changes to the Schedule 1 form, which is used to assess tax payable on virtual currency transactions. The new draft of the form will now question the taxpaying entity filling the form on whether any financial interests from cryptocurrency dealings have been received in the financial year. Where such have not been received, there will no longer be a need to file Schedule 1. But where such receipts are reported, an audit of cryptocurrency transactions could be carried out by the IRS.
The new draft is to enable the agency improve on its crypto tax collections. IRS Chief Counsel Michael Desmond reports that the agency is presently struggling to collect the full amounts due on the 12 million crypto-based tax returns it expects to receive.
This new draft opens the door for more stringent audits which may start to look at trading records from cryptocurrency exchanges.
Technical Outlook for Bitcoin
The breakdown of the symmetrical triangle on the daily chart was shortlived, as whale action forced prices back above $7,000 after hitting a weekly low of 6425. Price is back to trading in the daily range of the last two days, between the 23.6% Fibonacci retracement level at 7065 and the 7430 price level.
A break of 7430 is required to see further recovery towards 7865 initially, and then 8550 if upside momentum is strong. Above 8550, the 38.2% Fibonacci retracement level at 9507 could become a relevant upside target.
On the flip side, the floor of the range at 7065 continues to be the immediate support, below which price could once more continue the resumption of the long-term downtrend towards multi-week lows of 5820, with 6425 being a support pitstop.