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Jyoti Singh
Feb 13, 2020
by Jyoti Singh

IRS Slammed On Crypto Tax By The US Watchdog

IRS
The US representative for Texas, Kevin Brady, has requested the Internal Revenue Service (IRS) to clarify how the tax was being imposed on cryptocurrencies and on its transactions. In reply to Brady’s request, the Government Accountability Office (GAO), the watchdog of the US Congress published a report while evaluating the existing approach and public guidance of the IRS.

Three Recommendation By GAO

The GAO offered three recommendations to the US tax collectors, it also released a separate recommendation for a bureau of the US Treasury Department, Financial Crimes Enforcement Network. 

According to GAO’s report, “Part of the 2019 guidance is not authoritative because it was not published in the Internal Revenue Bulletin (IRB).” The report further suggested that the IRS has mentioned that except for the IRB’s guidance, all the others were subjected to change.

The guidance released by the IRS in 2019 not only answered the questions regarding the tax treatment of cryptocurrencies but also raised concerns among the virtual currency stakeholder. 

Convertible Virtual Currency

The GAO faced great difficulty while complying with tax requirements and foreign account reporting requirements. The GAO mentioned that it was unclear whether the foreign bank account report requirements would be applied to cryptocurrencies.

It was reported that the IRS and other elements of the federal government have been using the term virtual currency while referring to the cryptocurrencies. And recently, the executive director of the coin centre, Jerry Brito noted that the term virtual currency was being used in video games while referring to digital monies.

According to the White House publications and IRS documentation, the more specific term for cryptocurrency would be the “convertible virtual currency.”

The GAO has stated that FinCEN along with the IRS shared more information about applying foreign account reporting requirements under the BSA. The IRS while agreeing with the second recommendation of the GAO, mentioned that it does not agree with the first and third recommendations.

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IRS Slammed On Crypto Tax By The US Watchdog
Jyoti Singh
Jyoti is a graduate from GGSIPU and has done her PG Diploma in English Journalism from IIMC. Presently, she is working as a content writer with Agio Support Solution Pvt. Ltd. Her aim is to provide informative content about cryptocurrency and blockchain, to the tech-enthusiasts.

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