IRS warns crypto holders: dodge tax and we’ll hand out stiff punishments | Technology

Watch out, crypto-heads – the taxman cometh. The Internal Revenue Service has begun mailing more than 10,000 letters to cryptocurrency holders warning of stiff penalties if they fail to report income or pay tax on crypto transactions.

The service is sending out three variations of one letter, depending on the information it has on the recipient, reported the Wall Street Journal.

One version asks recipients to sign a statement declaring, under the penalty of perjury, that they are in compliance with tax rules that treat digital currencies like bitcoin as investment property akin to stocks or real estate.

“Taxpayers should take these letters very seriously. The IRS is expanding efforts involving virtual currency, including increased use of data analytics,” said the IRS commissioner, Chuck Rettig.

The list of names appears to come from a database containing 13,000 accounts holders who have bought, sold, sent or received digital currency worth $20,000 or more between 2013 and…