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The U.S. Internal Revenue Service is getting ready to publish its first guidance on cryptocurrency taxation subjects since 2014, the agency’s commissioner Charles P. Rettig told a lawmaker on Monday.
Commissioner Charles Rettig of the Internal Revenue Services has responded to an April 11 letter from Congressman Tom Emmer and 20 other congressional representatives (the Congressional Blockchain Caucus), which have requested that the agency would provide a series of public clarifications regarding clearer tax guidelines for cryptocurrency users i.e. how U.S. cryptocurrency users should be taxed on crypto forks for example.
Rep. Emmer is part of the Congressional Blockchain Caucus, a group of lawmakers that aims, among other goals, to solidify the reporting requirements and legal requirements associated with cryptocurrencies and blockchain; Emmer has already been quite pro-blockchain active over the past year.
The crypto and blockchain industries have evolved significantly in the years since the agency issued its last guidance in 2014, Notice2014-21. As a response to that notice, the IRS has received numerous comments. The response to the letter from the Congressional Blockchain Caucus has become inevitable as American crypto investors, traders and enthusiasts have been frustrated for years about an ambiguous tax guideline for crypto users. The IRS has considered cryptocurrencies as property while the U.S. SEC has treated them as commodities, securities, and money which is one of the most confusing issues that the IRS must clarify.
Commissioner Charles Rettig, responding to congressional letter, said that his agency has been “working with internal and external stakeholders” to figure out the key concerns which needed to be clarified first for taxpayers. The Commissioner also acknowledged the issues raised in Congress’ April letter, and confirmed that the IRS is committed to addressing those concerns:
“I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions and have made it a priority of the IRS to issue guidance. Specifically, your letter mentions (1) acceptable methods for calculating cost basis; (2) acceptable methods of cost basis assignment and (3) tax treatment of forks. We have been considering these issues and intend to publish guidance addressing these and other issues soon.”
After receiving Rettig’s reply, Rep. Emmer said in a statement:
“I am glad to hear of the IRS’ plans to issue guidance on this important issue. Taxpayers deserve clarity on several basic questions regarding federal taxation of these emerging exchanges of value. I look forward to seeing their forthcoming proposal, and working together to serve the American taxpayers.”
It isn’t completely clear yet how the new crypto taxation guidelines of the IRS will look like, but at least someone is pushing for a clearer path towards that direction.