TaxBit, a tax compliance company for cryptocurrencies, announced that it has raised $ 5 million in seed funding, and Winklevoss Capital, the family office of the twin brothers Winklevoss, participated in the project.
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In a January 6 announcement, TaxBit stated that the company plans to use the funds raised to enhance its software products internationally, as its tax reporting tools have so far accumulated thousands of daily cryptographic user groups.
TaxBit noted that the Utah-based company is planning to accelerate customer growth in the United States as well as in Canada, the United Kingdom and Australia.
TaxBit's cryptocurrency tax reporting tool supported by CPA, team of tax lawyers and software developers
TaxBit's "TurboTax of crypto" was launched in January 2019, and the product can automatically collect cryptocurrency taxes for crypto users, exchanges and merchants. TaxBit's CEO and founder Austin Woodward noted that the platform's unique feature was designed by a group of certified public accountants (CPAs) and tax lawyers with software developers, unlike most of its competitors, which are mainly driven by developers.
Woodward explained that this combination of industry experts allowed the company to create "the most accurate tax solution on the market" and implement a complete tax reporting process without the need for an additional CPA. The executive wrote in an email:
"TaxBit provides a complete transaction through a transaction audit trail, and any CPA or IRS investigator can easily verify the accuracy of user tax calculations when conducting an audit. In addition, as we have certified accountants in our staff And lawyers, so we can facilitate all IRS crypto audits from beginning to end, which means we can draft all IRS letters so users do n’t have to hire a CPA or lawyer to do so. "
Focus on immutability of tax records and align with IRS regulations
According to the TaxBit website, the company's tax reporting solution supports more than 2,500 cryptocurrencies and includes features such as API integration and tax optimization tools. When asked if TaxBit supports any particular cryptocurrency, Woodward replied that the platform supports "any currency available on exchanges or wallet trading platforms." The executive added that the company has been able to comply with the new guidelines of the IRS , And support all coins at the same time.
Woodward said that one of TaxBit's key features is an immutable audit trail designed to address major challenges brought about by the IRS 'frequent updates to crypto tax rules, which require accounting systems to change their tax rules.
The TaxBit CEO noted that the company is "continuously evaluating the best and latest technologies, including blockchain technology," in order to provide immutable, timely and accurate tax reporting.
Dragonfly Capital is one of the participating investors
At the same time, other investors in this round include Dragonfly Capital Partners, TTV Capital, Collaborative Fund, Valar Ventures, Global Founders Capital, Table Management and Album VC. According to the company, the funding demonstrates a shift in the way Americans view cryptocurrencies in terms of taxes and regulations.
The IRS released its cryptocurrency-based tax reporting guidelines in October 2019, asking approximately 150 million U.S. taxpayers to answer their questions about whether they receive, sell, send or exchange any virtual currency. According to some estimates, at least 12 million tax returns may contain some form of cryptocurrency investment.