The U.S. tax court says you must sell your crypto-currency savings if you owe the IRS

The U.S. Tax Court reaffirmed the IRS‘ decision to deny a Maryland couple an installment plan. They ruled that the couple must liquidate their $7 million crypt holdings to pay the tax debt.

The couple, Alexander and Laura Strashny, were unable to pay their 2017 tax return. As a result, they owe the IRS $1.1 million in unpaid taxes and penalties. In July 2018, they asked The News Spy to allow them to pay the debt in a six-year payment plan or IP.

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Along with the PI request, they attached a special form to show that they are eligible for the proposed scheme. In it, they mentioned earning more than USD 200,000 in annual salaries and withdrawing USD 19,000 per month from their USD 7 million crypto account.

After examining the form, the IRS ruled that the Strashnys can pay their full tax liability and denied the six-year payment plan. The debtors chose to challenge the agency’s decision in U.S. tax court.

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Now, the tax court has confirmed that Strashnys could not demonstrate why they could not withdraw additional sums from their crypto account to pay the debt.

According to the court documents:

„The SO [settlement officer] concluded that the petitioners were not eligible for a PI after determining that they could fully satisfy their tax obligation by liquidating a portion of (or pledging) their cryptomoney assets“

Investors in crypto should know that the IRS is delaying tax payments

The IRS doesn’t forget about cryptomonies
In May, the crypto tax software firm CryptoTrader.Tax shared details of a letter it claims to have received from the IRS. According to the document, the tax agency appears to be requesting outside contractors to assist with calculations of transactions by crypto currency users.

The IRS has rescheduled this year’s tax payment to July 15 because of the COVID-19 pandemic, but can extend it to Oct. 15 upon request. The agency classifies crypto currencies as property, which means any sale must produce a profit or loss that must be reported.