IRS Plans to Solve the Issue of Cryptocurrency Taxation At the D.C. Policy Summit Next Month

While cryptocurrencies have been here for some time, the IRS is still working on streamlining the process for cryptocurrency taxation. Cryptocurrency classification and taxation has been a complex issue not only for the IRS but also other government institutions across the globe.

Reportedly, the IRS is planning to have a policy summit next month on March 3 at its headquarters. To discuss the matter further, the IRS has invited several crypto advocates and companies at the summit.

As per the details obtained by Bloomberg Tax, the summit will include four 90-minute panels addressing the issues of cryptocurrency exchanges, technology updates, regulatory compliance and guidance, and tax return preparation.

The invitation for this panel notes that the panel will ‘share their views and engage with the audience, which will include IRS personnel from across the spectrum of tax administration, and individuals from other bureaus or offices within the Department of Treasury”.

The tax enforcement authority in the U.S. is working hard to catch hold of cryptocurrency tax evaders. In October 2019, the IRS had issued an additional guidance on the taxation structure for cryptocurrencies as part of the reminder for the tax payers to report their tax obligations.

Just a week back, the Government Accountability Office (GAO) noted that the IRS needs to do better over its previous tax guidelines. It looks like the decision for the Summit comes as a response to it.

As per the GAO recommendations, the IRS is likely to work on making clearer guidelines for cryptocurrency taxation and help the tax payers comply. The GAO report reads: “Part of the 2019 guidance is not authoritative because it was not published in the Internal Revenue Bulletin (IRB). IRS has stated that only guidance published in the IRB is IRS’s authoritative interpretation of the law. IRS did not make clear to taxpayers that this part of the guidance is not authoritative and is subject to change”.

The GAO thinks that the earnings from the cryptocurrency trading might have been underreported and that the revenue agency has failed to clarify it. Just to be noted, the IRS has rejected the recommendations of the GAO.