Canada Revenue Agency (CRA) is Auditing Crypto Investors — Heres What You Need to Know
The CRA has sent questionnaires to individuals to learn if citizens have a history of trading in cryptocurrencies, going as far back as 10 years.
The questionnaire comprises of 54 questions with sub-questions focusing on cryptocurrencies. Questions include a focus on investments, mining history, assets, wallets and ICOs, as well as the usage of mixing services to anonymize transactions. The questionnaire can be viewed here.
In a tweet earlier this year, CRA Project Oversight Director Jared Adams responded to Francis Pouliot, CEO of Canadian crypto firm Bull Bitcoin, and alluded to how cryptocurrencies could be used for money laundering.
Duly noted. https://t.co/PRyrVhOyw0
— Jared Adams (@jared_adams613) January 30, 2019
The CRA put out a statement on the matter, citing a need to enforce compliance in areas of emerging risk:
This unit has enhanced the CRAs ability to monitor and enforce compliance in areas of emerging risk, including the cryptocurrency space. There are currently over 60 active audits related to cryptocurrency. The CRA is also committed to helping taxpayers understand their tax obligations when using digital currencies, and to remind them that using digital currency does not exempt consumers from their tax obligations. The CRA has published educational material on its website regarding the tax treatment of dealing in Digital Currency.
Canada first began taxing cryptocurrencies in 2013.
Recently, Canadian news outlet CTVNews reported that scammers posing as CRA officials were defrauding unsuspecting individuals of hundreds of thousands of dollars, asking them to pay their taxes in Bitcoin, which is not possible (though the United States is opening up to this idea.)
The CRA expects crypto investors to submit their tax returns before April 30.
Several tools exist that assist crypto investors in filing their tax returns, including one recently released by Ernst and Young, though this is aimed at high-value investors and institutions.Read full story on Invest In Blockchain