Thursday, 25 April 2019

Congress just sent a letter to the IRS about “urgent need for guidance” on Crypto Taxes.

Congress just sent a letter to the IRS about “urgent need for guidance” on crypto taxes.Today, 21 members of Congress, led by Rep. Tom Emmer, sent a letter asking the agency to issue needed guidance on the tax consequences and basic reporting requirements for taxpayers that use virtual currencies. Congress has now sent four separate letters to the IRS about this issue.
In a statement, Rep. Emmer’s office said:

While initial guidance was provided, ambiguity around basic questions of how taxpayers should calculate and track the basis of their virtual currency holdings is unacceptable. According to a recent report from Coin Center, the 2014 guidance by the IRS failed to address fundamental tax questions, and repeated requests to the IRS for additional clarity have been made by a variety of entities. It also indicates that rather than providing clarity, the IRS has instead increased enforcement activities against taxpayers who “misreport” their cryptocurrency transactions.

Coin Center worked with Rep. Emmer to produce the bipartisan letter, which reflects several of the questions and concerns outlined in our recent report about cryptocurrency taxation, A Duty to Answer. The letter notes that the single piece of crypto tax guidance the IRS has released—the six-page “IRS Virtual Currency Guidance” from early 2014—fails to answer basic questions about crypto taxes, and that taxpayers deserve clarity from the agency. In other words, as the IRS Taxpayer Advocate put it a decade ago, “the IRS has a duty to answer all of the basic questions about transactions undertaken regularly by significant numbers of taxpayers, such as those involving virtual items.” In addition to describing these questions, our report provides common-sense recommendations on how the IRS should answer them.

In signing the letter, Rep. Emmer was joined by the other co-chairs of the Congressional Blockchain Caucus—Reps. Bill Foster, David Schweikert, and Darren Soto—as well as Reps. Patrick McHenry, James P. McGovern, French Hill, Terri Sewell, Warren Davidson, Stephen F. Lynch, Ted Budd, Eric Swalwell, Trey Hollingsworth, Ed Perlmutter, Greg Gianforte, Josh Gottheimer, Mark Meadows, Lance Gooden, Matt Gaetz, Ted S. Yoho, and Bryan Steil.

Congressional report on cryptocurrency cites multiple Coin Center resources.Last week, the Congressional Research Service (CRS), which serves as nonpartisan shared staff to congressional committees and Members of Congress and operates solely at the behest of and under the direction of Congress, published “Virtual Currencies and Money Laundering: Legal Background, Enforcement Actions, and Legislative Proposals.”
We were pleased to see that the report cites Coin Center resources four separate times: “Bitcoin: A Primer for Policymakers” twice on the first page, as well as “The Bank Secrecy Act, Cryptocurrencies, and New Tokens: What is Known and What Remains Ambiguous” and “Bitcoin innovators need legal safe harbors.” We will continue to publish materials that advocate for good policy on issues related to public blockchain networks and are glad that they are being read by policymakers.

The cryptocurrency policy briefing from Coin Center.

We held a briefing in Congress on open cryptocurrency tax questions.Last week we released a report, A Duty to Answer: Six Basic Questions and Recommendations for the IRS on Crypto Taxes, which examines the state of crypto tax policy in the US and calls on the IRS to address the open issues.
Today we took that message to Congress with a briefing for policymakers on the Hill. Coin Center Senior Research Fellow James Foust presented some of the questions raised in the report, explained Coin Center’s recommended actions for the IRS to address them, and fielded questions related to the nature of UTXOs, forks, and more. For a top-line summary of the report you can read his blog post: It is time for the IRS to answer open questions about cryptocurrency.


source: coincenter.org
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