The IRS now says that taxes are voluntary and that if the public does not see that the agency is enforcing the law, they will see a decline in those willing to comply.
According to the IRS website, the agency states that the U.S. income tax system is built on the “idea of voluntary compliance.”
“This means that taxpayers are responsible for declaring all of their income, calculating their tax liability correctly, and filing a tax return on time.
The IRS depends upon honest reporting.”
Mario Nawfal posted a video to X where the IRS provides further context.
“As we all know that our US tax system is a voluntary tax system and we depend on people willing every year to sit down fill out that form and pay their appropriate amount of taxes, so I really think enforcement is a reward to those who voluntarily comply.
And I think if the public does not see that the IRS is enforcing the laws, we’re gonna be at risk of losing people continuing to voluntarily comply.”
In other related news, the IRS has delayed crypto tax reporting requirements until 2026 as digital asset brokers receive more time to establish their systems.
The Internal Revenue Service (IRS) has announced a significant postponement of the new tax reporting requirements for cryptocurrency, extending the deadline to January 1, 2026.
This extension provides digital asset brokers with an additional year to refine and establish the necessary systems to comply with these regulatory changes.
The revised tax reporting regulations primarily focus on how to determine the cost basis for cryptocurrency assets held on centralized platforms.
Under these new guidelines, if investors do not specify an accounting method for their transactions, the IRS will default to a First-In, First-Out (FIFO) approach.
This means that the earliest acquired assets will be considered sold first, which can impact the overall tax liability for investors, according to Crypto Briefing.
This delay responds to widespread concerns raised by tax professionals regarding the preparedness of digital asset brokers to implement these important changes.
Many brokers currently lack the necessary infrastructure to support specific identification methods.
These methods would enable investors to select which specific units of cryptocurrency they wish to sell, a crucial aspect for accurate tax reporting.
Originally set to take effect in 2025, these reporting requirements would have mandated that brokers report the cost basis for any crypto assets sold on centralized platforms.
The extension allows investors more time to consider their accounting strategies, while also enabling brokers to enhance their systems to meet these new obligations.
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Also Read: Trump Says He Will Deliver The Largest Tax Cuts In The History of Our Country
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