Digital currency faces the same tax regulations as other forms of currency
It has been over a decade since the first cryptocurrency appeared in the world and, ever since it gained popularity, several regulatory agencies have been trying to establish guidelines for the activity. So far, a few successes have been collected; however, there are still some agencies like the Internal Revenue Service (IRS) that struggle with the task. That’s why the agency has started to look for an outside firm to recruit, so they can help the IRS to produce clear crypto-asset tax calculations and an income statement.
Through a memorandum, the IRS confirmed that it is preparing to seek collaboration from external contractors. The idea is to assess and calculate the profits and losses that can be caused by performing digital currency transactions. The official documents from the IRS were unveiled by the cryptocurrency tax software developer known as CryptoTrader.Tax on May 12.
According to the note from the IRS, the contractor firm will be supporting the taxpayer investigation of the IRS by counting, evaluating and calculating digital currency transaction gains and losses. It also added that there are some simple tasks when transactions are done within the same wallet or currency. Some transactions, on the other hand, can be a multifaceted task that can be complicated to calculate – most likely it will require special tools, technologies and infrastructure.
But the job doesn’t finish there. The agency wants its new service provider to also help with preparing reports, resolving data inconsistencies, errors and correcting/checking reports. The contractors will also need to testify if required during remunerator meetings, as well as give support to the IRS’s pilot project.