Tax alert! 350,000 warning notices sent out to Australian crypto investors

• News came out earlier this week saying that the Australian tax office is getting ready to send notices to investors in crypto in an effort to remind them of their obligations to tax. 
• To date, this is the biggest crypto compliance effort ever conducted by a government body. 

News came out earlier this week saying that the Australian tax office is getting ready to send around 350,000 notices to investors in crypto in an effort to remind them of their obligations to tax. To date, this is the biggest crypto compliance effort ever conducted by a government body. 

A spokesperson for the tax office in Australia said the following in regards to the warning notices:

“In April last year we published our Data Matching Protocol for cryptocurrency. Under this program we obtain cryptocurrency transaction data from currency exchanges on taxpayers who have bought and sold cryptocurrency. Using this data we’ve found that due to the complex nature of cryptocurrencies, some people may not be aware that there may be tax obligations, so our campaign is designed to help raise awareness and give people the opportunity to fix any mistakes.”

So if you live down under and have been trading in the world of crypto over the past couple of years, there is a potential that you will receive a notice for your crypto tax!

The warning notice highlights that the tax office looks to the world of crypto and bitcoin-like an investment for tax purposes. In a nutshell, this means that capital gains and losses rules apply when you sell and trade-in your cryptocurrency. 

So, if you’ve been trading in the world of crypto over the past few years and not been reporting it to the tax office, it would be a good idea to go back and calculate your crypto gains and losses and file an amendment to your prior year's tax returns in order to avoid an audit from the Australian office. Otherwise, if you have been reporting on your trading in crypto, you have nothing to worry about!

It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!