The leaders of a US Congress caucus focused on blockchain are calling for more guidance from the Internal Revenue Service (IRS) regarding the tax requirements for digital currencies like bitcoin.
In a letter dated 2nd June and penned by Representatives Jared Polis and David Schweikert – co-chairs of the Blockchain Caucus, a congressional group which was founded last autumn – the two called on the tax agency to “issue additional guidance on the tax consequences and basic tax reporting requirements for transactions using virtual currencies”.
The letter invokes recommendations issued last November by the Treasury Inspector General for Tax Administration (TIGTA), which criticized the IRS for its lack of a comprehensive strategy around digital currencies. At the time, TIGTA said that the agency’s shortcomings were leaving investors in the dark and increasing the risk of possible tax avoidance.
Polis and Schweikert encouraged the IRS to “consider the recommendations of the TIGTA and take action based on those recommendations”. Notably, they urged the IRS to work with the digital currency space directly as it moves forward.
The co-chairs wrote:
“Further, we encourage the IRS to engage with virtual currency exchanges to better understand their ability to engage in information reporting, including recordkeeping to track realized gain or loss and identify the amounts of virtual currency used in taxable transactions.”
This is the second letter sent to IRS from Congress in recent days on the subject of digital currencies. Late last month, a group including Senator Orin Hatch requested a response from the agency about its investigation into digital currency exchange Coinbase. That response is due today, though whether it has been formally delivered to Congress has not yet been announced.
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