IRS Says Long-Awaited Bitcoin (BTC) and Crypto Tax Guidance Incoming
Cryptocurrency traders in the US will finally receive some much needed guidance on how to deal with crypto taxation, according to Internal Revenue Service Commissioner Charles Rettig.
Representative Emmer and 20 other members of the House of Representatives sent a sharply worded missive to the IRS last month, asking the agency to clarify federal taxation policy on crypto – an action it hasn’t taken since releasing preliminary guidelines in 2014.
In addition to the very basic questions that crypto traders and investors have regarding taxation, Emmer noted the need for a comprehensive approach.
“There are many other open questions about the federal taxation of virtual currencies, but we feel that there is particular urgency in resolving the ambiguity around basic questions of how taxpayers should calculate and track the basis of their virtual currency holdings. It is not reasonable to expect taxpayers to satisfactorily answer these complex questions while the IRS remains silent.”
Emmer and his colleagues requested a reply by May 15.
Rettig issued an official response dated May 16.
“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.”
Rettig says the IRS has been working with “internal and external stakeholders” and is considering the issues addressed in Emmer’s letter.
“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.”