An official letter by US committee on September 19 asks Internal Revenue Service (IRS) to clarify cryptocurrency tax codes. The letter points IRS commissioner David Kautter urges to publish clear and provisional guidelines on how to deal with digital currency transaction and investment with regards to taxation. At present, every user with cryptocurrency holdings needs to file each transaction executed using cryptocurrency. This is because each transaction is considered a taxable event.
The opening letter by US representative Kevin Brady and a slew of other politicians from various states questions their earlier request made on September 17, 2017, to the IRS. According to the letter, officials raised a question against digital currency taxation policy and the lack of action and strategy against a virtual currency. However, the letter details that since a year IRS continues to crackdown individuals and businesses for using digital currencies without even filing tax. The letter goes on urging the updated guidelines and additional clarity on tax policies for people holding virtual currencies.
Since the emergence of cryptocurrency, lawmakers, and officials often strive to figure out “whether or not cryptocurrencies easily move within the country”. Nevertheless, the letter claims “IRS’s effort on enforcing clear guidance on cryptocurrency to treat its transaction for taxpayers”.
Beside the official continues arguing on lack of “preliminary guidance” which was noted in “response letter sent on May 2017”. It states as;
The IRS Commissioner, in his response to our May 2017 letter, described Notice 2014-21 as “preliminary guidance,” leaving the Committee to conclude that the IRS intended to issue additional guidance. However, to date, the IRS has not issued any additional guidance that taxpayers may rely upon to better understand their tax obligations.
Moreover, the letter indicates that the US Congressional Committee is not alone in this race. The Association of International Certified Professional Accountants, the American Bar Association, and other organizations urged similar concern, indicating the request on clear guidance. Not only IRS, but lawmakers are also pointing “tax agency” to issue a “written response” stating the plan of IRS to issue the guidance” and the “timeline for its release”. Also, the letter points to “Government Accountability Office” to look over this matter and undertake an audit.
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