Internal Revenue Service (IRS) urged to provide more valid clarity on cryptocurrency tax laws.
The eight members of the United States (U. S) congress was sent a letter to the agency by Internal Revenue Service (IRS) urging them to provide more valid clarity on cryptocurrency tax laws.
A letter signed by eight of the U. S Congress on the 20th of December stated :
“We wrote in April of this year urging the issuance of guidance for tax payers who use cryptocurrencies and we are pleased to see that you have issued guidance and addressed many questions we posed. We are much concerned the current guidance created many new questions related to the topics it seeks to address, namely forks and airdrops”.
A blog reported on the 9th of October, 2019 that the IRS originally cane our with an official ruling in cryptocurrency tax expectations. It notes some points of taxation including the tax on holders in the event of a cryptocurrency fork or airdrop ,regardless of holder’s knowledge of such an airdrop or the price action following the airdrop.
The letter sent on the 20th of December detailed that the original 9th of October IRS ruling used hypothetical examples for reference that not applicable and are therefore unclear for tax-paying citizens.
In the letter, it showed “dominion and control “relating to forks and airdrop on 9th October IRS ruling asking for transparency on the issue. From the lack of clarity surrounding each specific points that triggered a taxable event, the receptor of the airdrop or fork could face taxation with a knowledge of such.
The letter stated out a lack of guidance within the current IRS ruling regarding the various crypto based finance and future trading interest earned from digital assets deposit as well as crypto based income.
In addition,the letter also asked for decisive action on tax in withholding aspects such as the 1099 form of usage and also the topic of retroactive enforcement.
On completion the Congress member wrote:
“[W]e are concerned that the form of the guidance appears to indicate that this is ‘established’law.
We look forward to the IRS recognising the area as new and developing and will allow for reasonable interpretations on advance of the issuance of the most recent guidance “.
A blog explained last month that IRS rules don’t permit crypto space partipants to use like kind exchange tax exemptions.