The American Institute of CPAs (AICPA) has submitted comments to the IRS that seek to encourage the US tax agency to provide additional clarity as to how bitcoin and digital currency users should report their handling of the technology for tax purposes.
The comments come more than two years after the IRS issued a notice indicating that it would tax digital currencies as property, meaning that users had to report profits and losses, even when using the technology for everyday payments.
In multiple sections, the lack of clarity as to how the everyday use of digital currency is meant to be accounted for was the main subject of focus.
Further questions sought further detail on how digital currency users should assess the fair market value of digital currency at the time of sale, and whether they are supposed to use one exchange, or an average between exchanges, in their calculations.
Elsewhere, Lewis said that additional clarity was needed for how digital currency held by merchants should be considered, and whether charitable donations with the technology would need to abide by traditional rules of property appraisal.
The AICPA also sought to ask for clarity on whether digital currencies could be held in retirement accounts and how foreign reporting should be assessed given that the currency has no precise location.
Calculator image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.