IRS Hopes to Have New Crypto Operating Plan in '12-ish' Months, Official Says
Julie Foerster, the agency's point person for cryptocurrency taxation, also stressed a need for working with the community at Consensus 2023.
CORRECTION (May 8, 2023, 14:54 UTC): Revises headline and first three paragraphs to clarify that the IRS official was not talking about the agency's plan to update its guidance on how it will tax crypto.
AUSTIN, Texas — The U.S. Internal Revenue Service hopes to implement a new operating plan for dealing with cryptocurrencies in the next "12-ish" months, Julie Foerster, the agency's digital assets project director, said from the stage at Consensus 2023 on Friday.
"We're here to provide a consistent message," she said, "and also to create a plan and a path forward for, I will say the IRS, the enterprise, ensuring that we are looking at and engaging with you all in this room and a lot of others so we get it right and build a path forward."
Foerster said she was not able to give a date for when the agency plans to update and clarify its guidance on how it plans to tax crypto. The IRS is looking into other methods to communicate with this industry so taxpayers engaging in crypto can voluntarily comply with the reporting requirements, she added.
Foerster, who stressed her views are her own and not necessarily those of the IRS, said her five-person team was with her at Consensus, presumably moving through the convention center, talking to people about taxes and what the U.S. agency can do better.
"We are engaging with you all so we get it right and build a plan," she said. She later added the IRS "needs to look at the skills of the people we have today and those we will bring on in the future. ... We need to have the right tools and the right people."
As it currently stands, the IRS considers cryptocurrencies to be convertible virtual assets that can be used as payment for goods and services, digitally traded between users and exchanged for other currencies.
While not considered to be fiat currency, for federal tax purposes cryptocurrencies are considered property, and as such users are required to report their digital assets activity on their tax returns.
Foerster highlighted that the landscape for digital assets is an evolving one, and emphasized a need to increase communications between the agency and the crypto community. In particular she urged people to comment on a March proposal to tax non-fungible tokens (NFTs) like other collectibles. The comment period closes June 19.
Foerster added the U.S. tax agency is also talking to some of its foreign counterparts – she did not name them – about crypto taxation best practices.
“I will say that we have had countries come in and want to talk to us and in our large business and international division. Events like this and other events that we've attended also are providing us an insight or perspective internationally,” she said.
In the end, however, she said the agency has to find "other ways to get our message across to assist in voluntary compliance."
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