Washington, DC – Congressman Emmer (MN-06) along with his fellow co-chairs of the Congressional Blockchain Caucus have joined together to send a bipartisan letter to the IRS requesting guidance on how to report virtual currency ahead of tax day. Congressman Emmer was joined by a total of 20 of his colleagues.
In 2014, the IRS issued guidance which treats digital assets like property. Since then, no guidance has been issued on a number of reporting questions. Taxpayers deserve clarity on several basic unanswered questions regarding federal taxation of these emerging exchanges of value.
It has been over a decade since the IRS National Taxpayer Advocate identified, in its 2008 Annual Report, that the ambiguous tax treatment of virtual property and currency transactions was one of “the most serious problems encountered by taxpayers,” and nearly five years since the IRS released preliminary guidance on the issue.
While initial guidance was provided, ambiguity around basic questions of how taxpayers should calculate and track the basis of their virtual currency holdings is unacceptable. According to a recent report from Coin Center, the 2014 guidance by the IRS failed to address fundamental tax questions, and repeated requests to the IRS for additional clarity have been made by a variety of entities. It also indicates that rather than providing clarity, the IRS has instead increased enforcement activities against taxpayers who “misreport” their cryptocurrency transactions.
“Guidance is long overdue and essential to proper reporting of these emerging assets. The bipartisan support this letter has received should send a clear message to the IRS that clear guidelines for reporting virtual currency are necessary.” Said Emmer, “My colleagues and I are optimistic that the IRS will issue the guidance needed for taxpayers struggling with these reporting requirements.”
Signers include Bill Foster (D-IL), David Schweikert (R-AZ), Darren Soto (D-FL), Patrick McHenry (R-NC), Jim McGovern (D-MA), French Hill (R-AR), Terri Sewell (D-AL), Warren Davidson (R-OH), Stephen Lynch (D-MA), Ted Budd (R-NC), Eric Swalwell (D-CA), Trey Hollingsworth (R-IN), Ed Perlmutter (D-CO), Greg Gianforte (R-MT), Josh Gottheimer (D-NJ), Mark Meadows (R-NC), Lance Gooden (R-TX), Matt Gaetz (R-FL), Ted S. Yoho, D.V.M. (R-FL), and Bryan Steil (R-WI).
Read the full letter here.