Since the IRS recognizes Bitcoin as property, not currency, capital gains taxes apply to any Bitcoin you sell at a profit. When you buy Bitcoin, no matter how it’s used, you have to report it to the IRS.
The agency says that people who don’t report their gains could face penalties and interest.
If you use Cash App to buy Bitcoin, the app will provide you with a 1099-B form in February of the following year if you sold, spent, or transferred any Bitcoin in the previous tax year. The form will show how much Bitcoin you bought and sold as well as your net gain or loss for the year.
You’ll need to report your Bitcoin activity on your taxes regardless of whether you use Cash App or another service. If you don’t have a good record of your purchases, you can use a service like CoinTracker to help you calculate your gains and losses.
In conclusion, yes, Cash App does report to the IRS any Bitcoin activity that results in a profit or loss.