The Wall Street Blockchain Alliance (WSBA) has posted a letter addressed to the US Internal Revenue Service (IRS) asking the agency to clarify its stance on crypto and taxation.
In the past, the IRS has issued several statements and warnings to holders of cryptocurrency with guidance commencing in 2014.
In mid-2019, the IRS cautioned taxpayers that virtual currency transactions may require taxes to be paid on any gain. The IRS also sent out “educational letters” to certain individuals.
An FAQ has been posted and periodically updated by the IRS to help taxpayers adhere to their tax obligations.
The WSBA recognizes the IRS’s past pronouncements while noting that while certain questions have been answered, others have been raised. The letter incorporates 11 different requests regarding crypto-assets and tax treatment by the feds.
Topics like staking, stablecoins, airdrops, loans and more are addressed.
In brief, the WSBA highlights the challenges of change as engendered by the world of digital assets:
“Blockchain and cryptoassets continue to drive change, innovation, disruption, and the development of new products and services in the accounting space as well as in other areas of the economy. Accompanying this rapid development and maturation, however, is also the increasing amounts of uncertainty and ambiguity that continues to exist.”
Hopefully, the IRS takes this opportunity to engage with the WSBA to provide further clarification for taxpayers while not squelching emerging innovation.
The letter is embedded below.