U.S. IRS Says New Crypto Tax Guidance coming soon
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 (Congressional Blockchain Caucus), which had requested that the agency should 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.
Crypto and blockchain industry has evolved significantly in the years since the agency issued its last guidance in 2014, Notice2014-21. As a response to that notice IRS had received numerous comments. The response to the letter from Congressional Blockchain Caucus had 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 the 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 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.”
“I am glad to hear of the IRS’ plans to issue guidance on this important issue,” Rep. Emmer said in a statement after receiving Rettig’s reply. “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.”