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21 U.S. Congress Members Petition the IRS for Clarification on Crypto Tax Regulations
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As Tax Day in the U.S. draws near, 21 U.S. lawmakers are pushing the IRS to clarify its position on taxes regarding cryptocurrencies.
21 U.S. members of Congress are petitioning the IRS to release guidelines on how to approach taxes when it comes to cryptocurrencies. The IRS has not released an update on taxes and cryptocurrencies since 2014. Lawmakers are requesting the IRS to provide “guidance on the consequences nad basic reporting requirements for taxpayers that use virtual currencies.”
The Congressional Letter
The letter from Congress recommends the IRS clarify three main areas for taxpayers.
- What is the acceptable method for calculating the cost of virtual currencies?
- How does one assess the cost basis assignment and lot-relief for virtual currencies? Do taxpayers need to use specific identification when spending or exchanging cryptocurrencies?
- How do taxpayers approach hardforks, such as the Bitcoin Cash hard fork in 2017?
The letter was a bipartisan efforts signed by U.S. Representatives such as Bill Foster, Darren Soto, and David Schweikert. The letter requests the IRS to respond by May 15th.
Back in December, lawmakers introduced a law which would exclude cryptocurrencies from existing securities law. The SEC also clarified the security question regarding tokens in guidelines released last week. It is about time that the IRS respond to these concerns now that cryptocurrencies are on the agenda for lawmakers.
Do you expect the IRS to clarify these issues? Let us know your thoughts below.
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Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
