US Lawmakers Urges IRS to Provide Clarity for Crypto Taxation
September 21, 2018 12:43 pm
A group of U.S. lawmakers has requested the country’s Internal Revenue Services (IRS) to issue comprehensive guidance for taxpayers earning gains on digital currency investments or transaction.
In an open letter sent to acting IRS commissioner Mr. David Kautter delegates David Schweikert, Kevin Brady, Darin LaHood, Brad Wenstrup and Lynn Jenkins writes that the agency has had “more than adequate” time to form clear rules on how digital currency related gains would be taxed.
Instead of releasing such guidance, IRS has rather focused on the enforcement actions around preliminary rules issued in 2014, the letter asserts, referring cases like the agency’s push to accumulate earnings data on customers from cryptocurrency Coinbase and citing a previous letter sent to the IRS in 2017.
The Lawmaker said, “We, therefore, write again today to strongly urge the IRS to release updated guidance, giving additional clarity for taxpayers seeking to better understand and comply with their tax obligations when using digital currencies.”
Stating that it is “a key element of the IRS’s duties” to provide such guidance, they continue:
“We are concerned that the IRS is trying to enforce guidelines that do not appropriately advise taxpayers of their tax obligations when using cryptocurrencies.”
Moreover, they argue that failing to provide adequate guidance ‘severely limit’ taxpayers ability to comply with tax obligations.
The letter adds, the House Committee on Ways and Means, which Mr. Brady chairs, will further ask the Government Accountability Office to perform an audit on the matter.
In a blog post, Crypto advocacy group Coin Center praised the letter, with communication director Mr. Neeraj Agarwal noting that “presently, a user needs to calculate capital gains on every stick of gum they purchase with the digital currency.”
“That doesn’t make sense,” he writes, adding:
“We are glad to see Congress take action – there are many open questions surrounding taxation of digital currencies. It’s encouraging to see members of Congress step up to call for a more welcoming environment for these new technologies.”