The legal status, and especially the tax classification, of cryptocurrency in the US is a burning issue at the moment following IRS (Internal Revenue Service) demands that the Coinbase Bitcoin and Ethereum exchange surrender all US client data.
To help fix the situation, the Chamber of Digital Commerce and Steptoe & Johnson LLP today announced the formation of the Digital Assets Tax Policy Coalition, a Washington DC-based coalition created to help develop effective and efficient tax policies for the market. Participants include exchanges, wallet providers, and transaction processing companies with Steptoe as counsel.
They explain that developing these policies will allow the IRS to implement the recent recommendations by the Treasury Inspector General for Tax Administration (TIGTA) that the IRS develop a strategic plan for its virtual currency program and create third-party tools to allow for greater compliance, while minimizing the need for aggressive and burdensome enforcement actions.
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“Clear tax treatment for digital assets is essential to ensure robust growth of this important sector,” said Perianne Boring, President and founder of the Chamber of Digital Commerce.
“We are proud to be working with the industry’s leading companies to engage with policymakers on an issue of vital importance to the sector. Tax solutions that allow the IRS to do its job without resorting to actions such as a John Doe summons will be of benefit to all,” said Jason Weinstein, partner at Steptoe and co-chair of Steptoe’s Blockchain and Digital Currency practice.
“Blockchain and digital asset technologies pose unique challenges to tax administration. We look forward to working with the Coalition to develop policies that minimize compliance burdens for the industry while also providing the IRS the tools it needs to administer the tax code effectively and efficiently,” said Cameron Arterton, counsel at Steptoe.
Like a number of other regulators around the world, since 2014 the IRS has considered cryptocurrencies to be property, not currency, for tax purposes.