14 May 2020 Samantha McLauren
IRS Calls For Third-Party Taxation Specialists To Aid Crypto Tax Calculations
The Internal Revenue Service (IRS) bureau of the United States is on the lookout for contractors, which would aid the IRS in properly evaluating the taxes crypto owners and traders have to pay. The taxation bureau sent emails to various third parties, seeking help in calculating the profits and losses traders made.
The IRS, as well as the Securities and Exchange Commission (SEC) still struggle to keep up with the pace, set by crypto companies worldwide. In the email, the IRS noted that the service is “seeking outside contractors to aid our Revenue Agents in calculating the taxation for transactions, involving virtual currencies”. The IRS also included a Statement of Work (SOW) documents, noting explicitly that virtual currencies “fall under Notice 2014-21, where the IRS outlined the general principles of taxation to prove virtual currencies are subject to federal taxation”.
Read the full statement at CryptoTrader.Tax
Further, in the SOW documents, the IRS outlined the main responsibilities of a future contractor – to interpret all data, given from the IRS, as well as any related data that the contractor obtained via their taxation system”. Contractors will also help fill the gaps in the data, by obtaining further taxation information from the taxpayer. The contractors would have to turn over a detailed report to achieve the end goal.
According to the IRS, the data gathering helps transparency by combining hundreds of thousands of crypto transactions from both on-chain and off-chain data sources, API keys, information from taxpayers, as well as data from wallet services providers and exchanges.
The IRS’ battle with closing down on crypto taxations started in 2014, with Notice 2014-21, where the Revenue Service gave an overview of the core principles of virtual currency taxation. However, the crypto sector bloomed with the IRS not updating their Notice until Revenue Ruling 2019-24. The new ruling helps taxpayers have a better understanding of the specific types of transactions that have to be declared and taxed.
In 2019, the IRS even prompted thousands of crypto traders to “fulfill their legal obligation and pay their taxes”. However, with the rapid evolvement and mass adoption of cryptocurrencies and blockchain technology, governmental authorities are still lagging on proper crypto-oriented thinking and services.Blockchain cryptocurrency taxation Cryptocurrency Regulations Cryptocurrency SEC Crypto Market crypto cryptocurrencies cryptocurrency news crypto news economy SEC Security and Exchange Commission Tax us economy Security USA US taxes