The US Internal Revenue Service (IRS) commissioner Charles Rettig received a request from members of the Congress on the blockchain committee chaired by Congressman Tom Emmer; to provide clarity about filing crypto-related taxes before tax day.
A bipartisan letter drafted by Congressman Emmer along with 20 others in the committee expressed their concerns in the form of questions about the ambiguous tax treatment of emerging exchange of value. Issues such as acceptable methods for calculating the cost basis of virtual currencies, the acceptable methods of cost basis assignment and lot relief for virtual currencies, and tax treatment of forks especially with regard to the 2017 hard fork of the Bitcoin blockchain.
In the press release, it was stated that rather than provide clarity, “the 2014 guidance by the IRS failed to address fundamental tax questions,” and further spawned more request for clarity, meanwhile, the IRS only tightened its processes and made it more difficult for taxpayers by increasing “enforcement activities against taxpayers who “misreport” their cryptocurrency transactions.”
It was the opinion of the committee that an appropriate tax filing procedure should be in order and one long overdue since the IRS released its preliminary guidance on the subject – about five years ago.
Congressman Emmer said:
“Guidance is long overdue and essential to proper reporting of these emerging assets. The bipartisan support this letter has received should send a clear message to the IRS that clear guidelines for reporting virtual currency are necessary.”
Earlier this year, it would appear that as the tax year end closes in, cryptocurrency users were on edge as to how to report their crypto earnings. In the UK, tax filing seems a step-ahead as it published a comprehensive guide (Her Majesty’s Revenue and Customs (HMRC) guidelines) detailing how crypto-related transactions for individuals are to be treated during tax reporting. Meanwhile, in the US, the IRS had only so far declared cryptocurrency taxation policies as a core campaign in 2019.
On a broader perspective, the overall attempt by the US to provide an ambient environment for the emerging asset industry continues at a rather progressive pace. Recently, a bill designed to exclude cryptocurrencies from being identified as securities was reintroduced for consideration.
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