The Internal Revenue Service (IRS) of the United States invited a number of crypto companies to a discussion summit about the ways of taxation for incomes generated from trading digital assets.
The event is scheduled for March 3, 2020, and will include four 90-minute panes, according to Bloomberg Tax. The invitation by the IRS states that the government structure wants to “discuss regulatory enforcement, as well as balance taxpayer services.”
The main topics in the summit would be technology updates, tax return preparation, regulatory compliance, and issuance for crypto exchanges. The participants will share views and insight with IRS staff, as well as individuals, working on tax administration and other tax-related bureaus from the Department of Treasury. However, there is still no confirmation about the list of participating crypto companies, despite IRS confirming the news about the summit.
The summit comes amid problems for tax authorities to impose taxes on cryptocurrencies due to a lack of clear regulations. Disclosing incomes and returns filing are among the primary headaches for the crypto taxpayers, according to the IRS.
The main concern for the tax agency is cryptocurrency-related tax evasion. In 2019, the IRS sent over 10,000 letters to crypto holders with a warning to declare cryptocurrencies on the tax forms.At least three variants of the letter were sent to the holders, with the IRS clarifying that taxpayers “should not take the warnings lightly. Some crypto experts think that the IRS received the 10,000+ crypto holders database from Coinbase, which was court-ordered to give access to its database for over 13,000 users. The IRS filed a case back in March 2017, and eight months later won the case, obliging Coinbase to hand over personal data of clients with over $20,000 worth of cryptocurrencies in their accounts.
Kristin Smith, executive director at Blockchain Association, clarified that the IRS had plans for such a meeting at least since the start of January 2020.
“From my perspective, this event would help the IRS learn the problems in the crypto sector first-hand. Also, such a summit may boost the thinking process at the IRS, which may result in faster and fairer crypto regulations,” Smith added.
The IRS has a long relationship with crypto taxation, as last autumn, the tax agency published crypto guidelines, helping individuals to calculate their gains and evaluate their crypto-asset belongings.
However, the IRS also took a rewarding approach to those individuals, who declared and paid taxes on their crypto assets, issuing refunds. The total amount of refund remains secret, but crypto holders reported a full refund on their taxes, after paying the sum.
The main goal behind the IRS’s approach is crypto companies and holders in the United States to become compliant with the new regulatory framework as soon as possible. Laura Walter, commonly known in Twitter as “Crypto Tax Girl,” warned users to get compliant while the IRS still forgives some of its taxpayers. She also confirmed that “most of the clients who received warning letters from the IRS are early Coinbase users. Some of them are small holders, and others – big players”, citing that the IRS would involve civil and criminal enforcement activities against individuals who don’t declare their crypto holdings.