Cryptocurrency – ATO’s “Good faith” approach won’t last much longer

While it has been expected for a while that the ATO would start to ramp up the auditing around cryptocurrencies, it has yet to put the funding into such a scheme. It isn’t expected that this “light touch” approach will last much longer.

The ATO first showed signs of cracking down on compliance in March last year, when an undisclosed number of letters were sent to taxpayers, warning them to come clean with their capital gains or losses. Quite a few people have received these letters from the ATO which flags that there is a mismatch in the data has received from numerous institutions and those that have been declared by the taxpayers on their tax returns.

As the ATO gets a greater awareness of how many people are in this space, they will start to take a firmer approach.

As cryptocurrencies become increasingly embedded in the mainstream, one of the biggest challenges in accounting for them has been that some investors may not know that they need to disclose crypto assets to their accountants.

Accountants are being urged to familiarise themselves with how cryptocurrencies work before the ATO moves forward with compliance action. If you dabble in bitcoin or other cryptocurrencies, talk to your accountant, we are here to help.

Cordner Advisory - Your Business Advisory, Accounting & Tax Specialists. Catering for clients all across Australia, from the golden beaches of the Gold Coast and Sunshine Coast to the capital cities such as Brisbane, Sydney and Melbourne