According to Coindesk's April 11 report, as US residents submit personal tax dates approaching, more than 20 US lawmakers once again urged the US Internal Revenue Service (IRS) to clarify cryptocurrencies.
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In a letter to the IRS commissioner Charles Rettig, the legislator explained that it may be difficult for taxpayers to calculate their tax amount because the IRS has not yet answered the question of how cryptocurrencies are taxed.
In 2014, the US Internal Revenue Service issued a guide to cryptocurrencies. However, it has not been updated since then, so it does not cover the fork and other developments in the field.
The letter was written by Tom Emmer, Darren Soto, David Schweikert, Warren Davidson and Ted Bar. Two-party congressmen such as Ted Budd signed the joint signing. Last fall, the IRS had ignored another similar letter. The letter explains:
For virtual currency, federal taxation still has a lot of vagueness on some important issues.
In the letter, members of Congress listed three specific areas that are in urgent need of guidance:
- Acceptable calculation method for virtual currency tax base. In the Notice No. 2014-21 (Notice 2014-21), what methods does the IRS refer to in the “reasonable application of reasonable methods”?
- Acceptable virtual currency tax base transfer and tax unit reduction methods. Do taxpayers need to use a specific identification when they consume or exchange virtual currency, or can they be accepted, such as FIFO or average taxation?
- Taxpayers who use virtual currency encounter tax treatment after forks, such as bitcoin hard forks in 2017.
However, these members of Congress said that these issues are only part of the list of issues to be clarified.
US lawmakers "urged the US Internal Revenue Service to issue clearer and more comprehensive guidelines to clarify taxpayers' obligations when using virtual currency" and asked the IRS to provide a written response before May 15 (one month after tax date). Outline how the IRS will develop this guide.