What is likely to happen to those that do not pay their taxes on large crypto-currency gains that were cashed out in 2017? I'm specifically asking about the USA. Will that person likely get caught down the road and have to pay a penalty or will they even be caught?
The IRS considers bitcoin as a property, just like property or stock. If you trade bitcoin, then it's the same as if you were buying or selling stocks. Any related gains or losses are subject to the capital gain tax laws. Recently, the IRS won a lawsuit against Coinbase. Coinbase is one of the largest Bitcoin trading markets. The US Internal Revenue Service requires it to submit data relating to Bitcoin transactions whose users spend more than $20,000 from 2013 to 2015.