BY CNA team - October 27, 2018
More crypto guidance needed from IRS
The Information Reporting Programme Advisory Committee (IRPAC) is recommending that US tax authorities issue further guidance on how crypto transactions should be reported and taxed.
IRPAC, which issued the October public report shortly after a meeting between three subgroups of tax specialists and the Internal Revenue Service (IRS), asked that the tax authorities issue further guidance on the tax consequences of cryptocurrency transactions.
IRPAC members want to know if cryptos can be considered a specified foreign financial asset. They also want to know how cryptos that are sold are being determined for tax purposes and whether broker reporting apply to such transactions.
The IRPAC comprises tax professionals and specialists and serves as a public forum for discussion of mutual tax issues with IRS officials.
The report noted that the innovative rise of technology throughout the financial industry has also seen a rise in the popularity of investing in cryptocurrencies.
It pointed out that there has also been an equal rise in questions as to the applicable tax consequences that apply to such transactions and investments.
While the IRS considers virtual currency as property for US federal tax purposes, IRPAC members are still questioning other tax consequences.
Besides IRPAC, a number of US lawmakers recently asked IRS’ acting commissioner David Kautter to provide more robust guidance clarifying the tax issues on cryptos.