Coronavirus Could Delay 2019 Cryptocurrency Tax Filings and Payments

The coronavirus, which has caused mass closures, has resulted in many delays. Huge numbers of layoffs have already begun, and many who had taxable income last year may go without this year.

The US Delays Tax Filings

While penalties and interest will be waived during the 90-day grace period, the initial order from the IRS had kept the filing date set at April 15. According to Kevin Brady, part of the House Ways and Means Committee, “Taxpayers should file by April 15 as normal and the deferral will be applied automatically.” Democrats lauded the delay in payment charges, but requested a longer filing term, citing hardships from the COVID-19 outbreak. Treasury Secretary Stephen Mnuchin capitulated Saturday, pushing the filing deadline to July 15.

Defining Cryptocurrency Tax Rules

The delay in payments will likely help those who owe, and particularly those who made returns on cryptocurrencies. The current climate for Bitcoin has been icy, and returns made during the past year have been largely wiped out. Additionally, the confusion remains regarding how to file for cryptocurrency returns, as the IRS has yet to provide complete clarification on how cryptocurrencies are defined for tax purposes. Much of the debate centers on whether cryptocurrencies like Bitcoin should be classified as ‘cash’ or ‘investments.’ While the debate continues, taxpayers will not face fines for delaying payments on returns.

Market Woes Continue

The Bitcoin market enjoyed a brief rally at the end of last week but gave up some of its gains over the weekend. Prices have since stabilized at the $6,000 level, but have remained stagnant as fears have gripped investors. Stocks also faced difficulties, closing the worst week since October 2008 during the last financial crisis. The potential for a genuine recession continues to grow, and fear remains deeply embedded in the national psyche. Delays in tax payments could offset some of the growing costs of the shutdown.