IRS Tweaks Crypto Question Language on 2021 1040 Draft Form

Is the IRS asking taxpayers about crypto?

Yes – Crypto questions are now on the forefront of your 2021 Form 1040

The 2021 Form 1040 features a critical question regarding cryptocurrency. When filing your taxes, you will be asked: “At any time during 2022, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

This question aims to gather information about taxpayers’ involvement in cryptocurrency transactions, including receiving rewards or awards, or engaging in exchanges or acquisitions.

The inclusion of this question underscores the growing importance of cryptocurrency in the financial landscape and the IRS’s efforts to ensure compliance with tax laws. Taxpayers are advised to carefully consider their responses and consult with tax professionals if necessary to ensure accurate reporting of their cryptocurrency transactions.