The EY organization announced an alliance between TaxBit, a tax and accounting technology provider for cryptocurrency and other digital assets (e.g., non-fungible tokens (NFTs)), and Ernst & Young LLP (EY US) “to help organizations meet tax reporting requirements for digital assets.”
Regulators are starting “to demand more formal reporting practices as companies are getting further involved in digital asset transactions.”
This is intended to seamlessly help “address tax reporting requirements (e.g., Internal Revenue Service (IRS) tax filings), meet regulatory deadlines and implement cryptocurrency and tax accounting software faster with less strain on business, technology and operations resources.”
This alliance is part of the EY Digital Asset Tax Suite and “enables the Digital Asset Customer Tax Operations solution, which combines TaxBit’s tax reporting software with EY tools such as the electronic Tax Form Validator (eTFV), Customer Tax Data Master (CTDM) and Withholding & Reporting Calculator.”
The EY Digital Asset Tax Suite “builds upon existing EY solutions, including the Blockchain Analyzer Tax (BAT) Calculator, and applies to the market participants including global cryptocurrency exchanges, emerging decentralized finance (DeFi), gaming platforms and first-timers.”
Thomas Shea, EY Financial Services Crypto Tax Leader, Ernst & Young LLP, says:
“While we’re seeing a ton of progress in Washington, there’s still uncertainty amongst the taxpaying community. The EY Digital Asset Tax Suite attempts to bridge the current gap and assist those engaging the digital asset market in meeting their tax reporting obligations.”
The suite is composed of the following solutions and services:
- The EY Digital Asset Customer Tax Operations offering, supported by TaxBit, focuses on detailed information reporting, electronic tax validation, withholding, cost basis reporting and tax reporting.
- The EY Tax Analyzer for Digital Assets (TA-DA) serves as an interactive solution that simplifies tax reporting for digital asset-related transactions by directly pulling exchange and on-chain wallet data, such as trading, DeFi, gaming and NFTs.
- The EY Crypto and Payment Reporting service leverages an existing EY tool for Form 8300 e-filing. Under the new provisions in the Infrastructure Investment and Jobs Act, digital assets are required to report payments over $10,000 received in a trade or business.
- EY US also has a broad array of managed service offerings tailored for the digital asset ecosystem through the firm’s subject matter knowledge. These offerings include direct and indirect tax compliance and reporting, income tax and statutory accounting, payroll operations, entity compliance and governance and transfer pricing.
Mike Johnson, EY–TaxBit Alliance Leader, Ernst & Young LLP, says:
“The digital asset industry is a complex space that needs a comprehensive suite of services to adapt to the evolving regulatory requirements. Through our alliance with TaxBit, we are more ready to support clients with their digital asset tax reporting needs.”
Lindsey Argalas, COO, TaxBit, says:
“At TaxBit, we are focused on providing enterprises a single system of record to manage digital assets tax and accounting. Our alliance with EY US bolsters our solutions by integrating world-class expertise, services and support. We look forward to working alongside the EY US team to enable compliant digital asset adoption for the global economy.”