Thomson Reuters has integrated a new cryptocurrency tax tool, dubbed ‘Virtual Currency Organizer,’ into its tax reporting system GoSystem Tax RS. To achieve that, the information vendor has collaborated with Verady, a startup that focuses on cryptocurrency accounting and auditing.
This organizer helps companies meet regulation and investor requirements to verify cryptocurrency assets. According to Reuters, it acts as a single point of data entry and review for crypto transactions, including exchanges, forks, purchases, and payment for services.
As such, accounting professionals servicing crypto-transacting clients will have sources required when reconciling cryptocurrency balances and transactions.
“Preparers will now for the first time be able to see and review these transactions in a central location and have the information properly reported on the appropriate tax forms,” the company explains.
Thomson Reuters provides different crypto-focused products including a price data feed for virtual currencies, dubbed “Cryptocurrency Real Time Rates.” It also launched a new version of its MarketPsych Indices (TRMI) to include market sentiment data for the top 100 cryptocurrencies.
Thomson Reuters taps Verady’s Ledgible platform, which offers capabilities to meet the accounting and verification needs surrounding cryptocurrencies, which often the lack of trusted sources of data. The solution, which works both as a standalone system and in conjunction with existing accounting ledgers, enables businesses who adopt cryptocurrencies to account, audit, and value their financial activity involving blockchain assets.
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More specifically, Ledgible retrieves cryptocurrency transactions directly from the blockchains where they take place and report on them in a legible manner. Ledgible users now can create reports ready for Thomson Reuters’ GoSystem Tax and UltraTax.
IRS updates guidance on crypto
“Ledgible allows Investors, tax preparers and financial institutions to perform AICPA SOC assured portfolio tracking and reporting of cryptocurrency activity. Ledgible has been specifically built to simplify the painful and complex process of consolidating records from exchanges, wallets, blockchains, and other cryptocurrency data sources,” it further explains.
The US Internal Revenue Service (IRS) has recently published over 40 Q&As on cryptocurrency tax compliance in a fresh signal of increasing its focus after first being slow to stay abreast of the growing industry.
At the very core, the IRS still deems crypto assets to be property rather than currency for income tax purposes, the same as its regulatory guidance came out five years ago. That means the authority will continue to tax crypto profits and losses like those for stocks, at capital gains rates.
Most recently, the agency sent letters to taxpayers who might have failed to report income and pay the resulting tax from cryptocurrency transactions.
Since 2014, the so-called ‘Notice 2014-21’ has been the only guidance the tax department has published before mailing cryptocurrency holders warning of penalties if they fail to pay tax on crypto transactions.