US lawmakers urge the IRS to provide guidance on how to report virtual currency taxes by April 15

US lawmakers urge the IRS to provide guidance on how to report virtual currency taxes by April 15

  

According to a statement on April 11, US lawmakers submitted a joint request to the US Internal Revenue Service (IRS) requesting detailed information on the tax status of the reported cryptocurrency.

Twenty-one different representatives jointly sent a letter to the US tax authorities asking for guidance on how to report virtual currency taxes. The action occurred before the April 15, 2019 federal income tax filing deadline.

In the joint application letter, the delegates mentioned the efforts of the US Internal Revenue Service to establish tax treatment for virtual assets. The letter pointed out that the way the IRS handles virtual property and currency transactions is one of the most serious problems taxpayers have encountered since 2008.

The lawmakers also pointed out that the IRS issued guidance in 2014, but the tax management inspector found that the guidance was insufficient and suggested providing better guidance on how to treat various virtual currencies within the tax system.

The letter urged the US Internal Revenue Service (IRS) to provide guidance on the tax consequences and basic reporting requirements of taxpayers using virtual currency, saying that this emerging asset “has a lot of ambiguity on some important issues of federal taxation”.

Specifically, the letter requires the US Internal Revenue Service to specify acceptable methods for calculating the cost basis, cost basis allocation, and bulk deduction of virtual currency, as well as the tax treatment of cryptocurrency hard forks, which cited the occurrence of August 2017. Bitcoin forks into Bitcoin Cash (BCH).

The letter concludes that "it is unreasonable to expect taxpayers to satisfactorily resolve these complex issues in the event that the IRS remains silent."

One of the representatives who signed the letter, Tom Emmer, previously proposed three bills to support blockchain technology and cryptocurrency.

Recently, Credit Karma, a US private finance company, disclosed that the number of applicants reporting short-term cryptocurrency losses in the first month of 2019 surged five-fold compared to the same period in 2018. Earlier, a survey released by Credit Karma showed that only 53% of Americans plan to report tax revenues and losses they receive through cryptocurrency transactions, while 35% of respondents claim that they have suffered losses through encrypted transactions and will not report Their tax returns.