The IRS on the other hand with these kinds of notices is not out to get you, and I don't believe I've ever heard of someone being charged with perjury for signing an IRS document that wasn't true (and they genuinely thought it was true), especially from the perspective of a small time residential investor who is making an effort to be compliant with tax law.
I think a more sane proposition is this, if you only have a few thousand USD in crypto, you probably don't need to hire a tax lawyer or tax accountant (or both) to review your documents and compliance.
But if you're at 5 figures or above (10k USD+) then spending hundreds of dollars, up to a thousand or more, just to retain a lawyer and/or accountant could be a smart move for you to ensure that everything has been handled appropriately.
And it's not "hire a lawyer to review this one document", it's hire a lawyer and/or accountant to review your compliance with all tax laws and investment laws federal and local, and it's something you should do regardless of receiving a letter like this. If you have a lot of money in crypto and have never spoken with a lawyer or accountant about it, you should probably consider doing that sooner rather than later.
Even if you do "lie" to the IRS, and they think you have, they aren't going to have you charged for lying and put you in jail, they're just going audit you or determine you owe them money without you admitting it, then send you a bill and enforce that bill over time through wage garnishment, account levy, tax lien, etc. They would much rather tell you that you have debt and garnish your wages than lock you up.
Generally they save the courts for extremely egregious and offensive cases of intentional tax evasion (like people who use the 861 argument)
Citation needed. The IRS can be among the most vicious of any federal agency. Having dealt with FATCA situations with overseas Americans, Treasury is, in my experience, nobody’s friend.
The IRS will generally take the most effective tack it can in getting the money it is owed. For honest mistakes, that usually means sending you a formal notice that it believes you are out of compliance and requesting that you pay them. If you pay them, all is forgiven. If you can show to their satisfaction, with supporting documentation, that you don't actually owe the money, all is forgiven. (I once got a notice that I owed $11K because of some stock sales I'd forgotten to report and education credits they didn't believe I was entitled to; after producing documentation on the cost basis of these sales, a course transcript from the educational institution, and an amended tax return, the total was reduced to $50, I enclosed a check for that, and I got a notice back that the matter was closed.) If you try to pull any funny business or argue with them and your arguments are not backed up in fact, they will viciously hound you until you pay the money that you owe.
If you pay them, they go away. Or sometimes they pay you and go away. (My first IRS letter was after my first semester of college, which was a bit disturbing since my whole income that previous year was ~$1k, but opening it revealed that I had neglected some sort of new education credit and they were giving me a small check to account for it.) My only remaining "fear" of the IRS is the scary Audit, because I know my record keeping is terrible and I don't want the anxiety of calling places and hunting down receipts or getting sworn letters from people that such-and-such checks were used for rent sharing not income/paying for services, and so I only hope that any audit could just be resolved by paying a lump sum even if with a bunch of effort that could get reduced...
I don't believe I've ever heard of someone being charged with perjury for signing an IRS document that wasn't true
You could look for some perjury charges if you disbelieve.
I have a friend who took this advice way too literally when we were 18.
I was in the car when he got pulled over for speeding once, and he refused to say a single word to the officer. He handed over his license, registration and proof of insurance, but wouldn't answer any questions.
The cop asked how him how fast he thought he was going, and my friend didn't even tell the cop that he wouldn't answer his questions. It was just the straight silent treatment. The cop was clearly getting agitated. I was begging my friend just to answer the questions, even if just say he didn't remember or something, but he refused.
Fortunately, his grandma is in the backseat and really saved the day by apologizing for her idiot grandson. My friend wound up only getting a warning thanks to his grandma, but no doubt we would have gotten a big ticket at the minimum if he kept the silent treatment up.
Another time, we both got busted for launching bottle rockets in a public park a couple weeks after the 4th of July. There were several witnesses including the people that called the cops, but once again my friend did the exact same silent treatment to the cops. I sang like a bird about my own actions while being careful not to say that my friend had also launched rockets.
Fortunately the questions were directed at both of us, and we weren't asked specifically who all was involved before my friend felt guilty that I was taking all the blame and started talking to the cops himself.
Good thing because in Ohio launching bottle rockets is an M-1 misdemeanor carrying up to a six month prison sentence. The cops could have been jerks, but instead they recommended that the prosecutor drop charges after we did some community service. Had my friend stuck with the silent treatment, I fully believe we would have been punished more severely.
Again I urge common sense. Every situation is different. Had it been someone else or somewhere else or a slightly different situation, being quiet could have been the right decision. This could be an example of white privilege, but so far in my life, I've never regretted just being honest with the cops.
> [..] I urge common sense [..]
That's the problem with your post.
You fully believe [..] and you urge common sensen.
You fully believe, but you don't know for sure what would've happened in your alternative reality. We miss a lot of details as well. For example, are you POC? What about your friend? White privilege is still real in 2019 (and I say that as someone who's whiter than white). I fully believe I got away with things in my youth someone who's POC would not have gone away with. Not just cops specific, but also community specific, neighbor specific, etc.
The point being, what might be common sense to you or me might not be common sense to any random person.
Here's a famous video [1] of a lawyer and former cop who suggest you never talk to the police. ACLU also has videos online with examples of how you may incriminate yourself even whilst you're fully innocent.
I wonder if we're thinking of the same kind of bottle rocket... like a plastic soda bottle propelled into the air by water and/or compressed air? Why is the penalty so severe?
Anecdote time. Having been stopped by police in the States four times (that I can recall offhand) over the years -- with a legitimate justification in each case -- my experience has been that courtesy and cooperation have served me well. On a couple of occasions when I could quite reasonably have been ticketed and fined, I have instead been sent on my way with a friendly warning to be more careful. I strongly suspect taking a strict "don't talk to the police" line would have cost me quite a bit more stress, time, and money.
When "never talk to police" comes into play is when they are doing a criminal investigation. And even then, when to pull out the fifth amendment card depends on individual circumstances. It can definitely escalate an otherwise innocuous situation if you overuse it.
Also, try to remember that what makes the news is newsworthy for a reason.
Alternatively, we see politicians walking back false statements or changing stance daily because the thing they said previously was what they believed based on the facts present at the time -- and they are never held to account.
At the end of the day, the IRS just wants their money.
On the other hand, IANAL, but a tax lawyer once said to me the only thing you go to jail for is hiding money. You can claim weird deductions, invent new depreciation schemes, misapply rules and all the IRS will do is say "No" and stick you with a bill. But if you're hiding income, it really upsets them.
It's incredibly easy to do what you think is the right thing but still "lie" because you didn't know/understand all the facts, implications, and details.
Always, always, always, get qualified legal/accounting counsel involved.
No, your uncle the family law attorney is not qualified.
It's also quite entertaining.
Until you've sat across from a pair of investigators, it's hard to guess how you'll respond to relatively simple questions.
I've run mock interview sessions for these and it's incredibly easy to trip someone up once you get them angry or get them agree to something you've purposely misstated.
And that's assuming everyone is doing their best to give a complete and accurate statement+summary minimizing their own biases.
When it comes down to "knowingly and willfully" it is often a judgement call.
This is well-established legal understanding. Please read up on 302s:
https://steemit.com/informationwar/@stevescoins/what-is-an-f...
From an expected value perspective the result has a negative sign but a small magnitude, so you avoid it whenever you can but not if doing so comes at a significant cost. But low probability events with large negative consequences are the category of thing that worries people a lot; other instances in this category are things like plane crashes, child abductions, forcible rape and terrorism. It's not strictly rational to be as afraid of them as many people are.
However, in this case there's also the consideration that the probability of the law being selectively enforced against you has a lot to do with whether the government doesn't like you, so if you're the sort of person the government (or some plausible future government) might try to stick something to, then the "low probability of enforcement" side of the equation changes and you're in entirely different territory.
And we also generally, as a pro-social activity in solidarity with those populations, might want to err on the side of encouraging everyone to behave in a way similar to what those vulnerable populations would have to, to normalize it and make that sort of selective prosecution more difficult. At least as long as we continue to have these disproportionate penalties for what are in practice honest mistakes and everyday behavior.
Here's a guide:
https://www.moving.com/tips/change-address-checklist-who-to-...
Just a word of advice to anyone who may be receiving letters like this in the future. Do not, under any circumstances, sign a statement that you have followed the law without consulting with qualified counsel first. You should know that every time you sign off on something to the federal government, if it turns out not to be true, they got you on a count of Lying to the Federal Government. (Yes, each signature is a separate count. At least that's the way our lawyers explained it to us when advising us on FDA approval for our product.) So you can easily rack up years behind bars in this situation right? There's the original forms in you return. How many times did you sign papers there? Then there's this statement that they want you to sign. That's another potential count.
What's worse, you may have made an honest mistake, and you really do believe that you are in compliance. So you go ahead and sign such a statement. Only you weren't in compliance. Now what? I hate to say this, but just don't. Don't sign it. Get everything looked over by the experts first. Maybe they can even negotiate with the IRS on your behalf if you have made a mistake.
But you don't want to be in the position of having signed something like that with honest mistakes potentially out there in your documentation.