IRS (Internal Revenue Service) has told the national Congress that it will issue new regulations that will streamline cryptocurrency taxation here in the United States. Over the last one, the cryptocurrency industry in the country has grown tremendously.
Proper guidelines about crypto taxes will help investors trade in various accredited digital assets legally. The government will also benefit from the ballooning cryptocurrency industry globally.
New Cryptocurrency Taxation Guidelines to be Released
IRS made the announcement last week while responding to a letter sent to the commission by a group of 21 Congress legislators who wanted the agency to come up with robust guidelines. The team lead by Representative Tom Emmer is of the idea that proper requirements will prevent tax reporting issues that institutional investors as well as individual cryptocurrency traders face when filing taxes.
During the press interview, Commissioner Charles Rettig acknowledged that there are grey areas that need to be smoothened to make the cryptocurrency taxation process easier. At the time of writing, the financial regulator is working on new regulations that will make it easier for cryptocurrency investors to file taxes.
The Commissioner also stated that taxpayers deserve accurate information about the basic issues related to taxation of cryptocurrency transactions and the regulator is determine to provide all the information needed to ease the process.
The three main issues highlighted by the Congress team include:
- The acceptable methods of calculating cost basis
- Acceptable methods of cost basis assignment
- Tax treatment of forks
Charles Rettig confirmed that the agency is aware of these issues and is working on new regulations that will solve them amicably.
Cryptocurrency taxation is necessary to ensure that governments also benefit from this lucrative industry. Taxation will also make the virtual currencies acceptable not only here in the United States but also in other parts of the world. More people will be willing to invest in cryptocurrencies if the government appreciates their impact in the financial industry. Read more about cryptocurrencies and blockchain technology here.