The United States Internal Revenue Services is working on the issuance of tax guidance for cryptocurrencies, according to a May 16 letter.
The letter was issued in response to an inquiry made by 21 representatives in Congress, asking to provide specifics on the crypto taxation.
The response letter by the IRS Commissioner Charles P. Rettig clarified that the tax agency is working on the tax guidance on priority.
“I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions and have made it a priority of the IRS to issue guidance,” Rettig wrote.
The tax agency also outlined that the instructions will cover an array of issues including “acceptable methods for calculating cost basis, acceptable methods of cost basis assignment, and the tax treatment of forks.”
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In addition, digital currencies are considered as property and the existing property tax laws are applicable for cryptocurrency transactions, according to Rettig’s letter addressed to Congressman Tom Emmer.
However, no timeline was provided for the issuance of the guidelines as the tax commissioner only mentioned that it will be published “soon.”
A much-needed guideline
In response to Rettig’s letter, Rep. Emmer stated: “I am glad to hear of the IRS’ plans to issue guidance on this important issue…Taxpayers deserve clarity on several basic questions regarding federal taxation of these emerging exchanges of value. I look forward to seeing their forthcoming proposal, and working together to serve the American taxpayers.”
Many crypto-related companies in the country are also pushing for specific crypto tax laws as the rules are still murky. Finance Magnates earlier reported that these crypto-related issues have also become a priority among the lobby groups.
Rep. Emmer, who is a part of the Congressional Blockchain Caucus, also introduced three bills to support cryptocurrencies and blockchain as a whole.