Arabic AR Chinese (Simplified) ZH-CN English EN French FR German DE Japanese JA Portuguese PT Russian RU Spanish ES Turkish TR
Connect with us

Hi, what are you looking for?

Cryptocurrency

The Treasury and Internal Revenue Service have reiterated their intention to tax issue guidance on cryptocurrencies

The agencies released their Priority Guidance Plan for the 2021-2022 fiscal year on Thursday, and designing brokerage rules for crypto still makes the list. The Tax Administration portion of the document details: “Regulations regarding information reporting on virtual currency under §6045,” as one such priority.

The previous year’s guidance plan also listed “Proposed regulations regarding information reporting on virtual currency under §6045,” as a priority under the Tax Administration section. 

Rule §6045 contains guidance on brokerage reporting. As of now, there is no unified regulation for exchanges related to virtual currency tax reporting. Though the reporting burden ultimately falls on the individual, traditional exchanges must send forms to users and the IRS delineating the year’s trading activity, making it easier for the consumer to report their trading activity to the tax watchdog. This is not yet the case for crypto, though some exchanges do send 1099 forms when possible.

The IRS has been steadily beefing up its tools surrounding crypto, requesting an additional $32 million to boost its crypto and cyber operations in its recent budget report for the fiscal year 2022. IRS chief Charles Rettig has indicated that quelling crypto misreporting could be helpful in closing the tax gap, or the unreported sums of taxable funds. 

The tax agency has continuously said additional clarity surrounding crypto broker reporting is coming, although it remains unclear when this guidance will be released. Many are expecting the IRS to mandate exchanges to report using Form 1099B, since unlike other types of 1099 forms, it tracks cost basis of the assets — a key to calculating capital gains and losses for crypto. However, this guidance has yet to materialize, and the agency is now rolling over the priority to this year’s list.

The recent infrastructure bill out of the U.S. Senate further clouds who qualifies as a “broker” in the crypto context. This could make tax codes even more opaque for those looking to report their digital assets without added clarity from the IRS. As the IRS drafts guidance under rule §6045, it will have to nail down who qualifies as a broker. As of now, Bloomberg has reported that the Treasury claims the definition will only apply to trading platforms in the coming guidance. 

theblockcrypto

Featured

Bitcoin Mining

Despite a $72 million rescue offer from creditors, concerns have been raised about the general viability of the Bitcoin trading community amid a protracted...

Altcoin

Ripple is attempting an upside break above the $0.365 resistance zone against the US Dollar. XRP price could fail to gain pace if it...

Bitcoin

Bitcoin price is facing resistance near $17,000. BTC could start another decline unless there is a strong move above the $17,000 resistance zone. Bitcoin...

Ethereum

Ethereum started a fresh decline from the $1,320 resistance against the US Dollar. ETH is struggling and remains at a risk of a move...