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Monday, September 24, 2018

Congressman Brady Asks IRS To Issue More Guidance on Virtual Currency

On 9/19/18, Congressman Kevin Brady (R-TX), chair of the House Ways and Means Committee sent a letter to the IRS asking them to issue more guidance, as it had promised in 2014, on taxation of virtual currency. Chairman Brady also refers to the 2018 letters from the ABA and AICPA requesting guidance.

In the letter, Brady states:

"While the Committee appreciates the IRS’s need to undertake enforcement actions to ensure that taxpayers generally meet their tax obligations, in this case, we are concerned that the IRS is seeking to enforce guidance that does not adequately advise taxpayers of their tax obligations when using virtual currencies.  Furthermore, while the issues surrounding virtual currencies are complicated and ever evolving, a key component of the IRS’s duties as the nation’s tax administrator is to assist taxpayers in understanding what their tax obligations are and how they may best meet them.  A failure to put forth adequate guidance severely hinders taxpayers’ ability to do so.  The IRS has had four years to work through these issues since its preliminary guidance was issued, providing more than adequate time for the IRS to thoughtfully consider what additional information is needed.

We therefore strongly urge the IRS to expeditiously issue more robust guidance clarifying taxpayers’ obligations when using virtual currencies. We also ask that you provide a written response outlining where the IRS is in its efforts to issue updated virtual currency guidance, what the IRS intends to cover in this guidance, and a timeline for its release.  In addition, to assist the Committee in better understanding this issue, we will be asking the Government Accountability Office to undertake an audit on this matter."

I hope this can occur before the extended due date for 2017 returns (10/15/18).  Let's see.

What do you think?

4 comments:

Abhinav said...

Very nicely explained, thanks and keep writing.
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Timberline Tax Group said...

Great article; my firm anticipates a lot of folks needing help with this once virtual currency becomes more mainstream.

Dinh Thuy said...

With the advantages such as fast transaction, convenience, no cost, not afraid of devaluation, inflation as well as fake ... the virtual currency is now very popular.

Dinh Thuy said...

There are more and more powerful virtual currency types available today, one of which is high security, extremely low transaction costs, no organization or management.
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