On October 9 of this year, in Washington, the IRS (United States Internal Revenue Service) issued a guide on the tax issue regarding cryptocurrencies and electronic commerce, in an effort to help taxpayers to to have clearer information regarding the increasingly changing world of virtual commerce and that they have the possibility of keeping up with their taxes.

The background of this guide

Already in 2014 the IRS had issued a guide for the handling of taxes and contributions regarding the use of virtual currency, however, this information is expanded and clarified in this new guide that also includes a section of the income rules from 2019 to 2024 and a section of frequently asked questions that will allow taxpayers to clarify any doubts they have regarding the issue.

This is done in response to the need that arose in 2014 with the previous guide to identify that there were a lot of doubts and questions that taxpayers had and had remained unanswered, coupled with that it was also identified that there were many variations in the market and that is why it became much more complex and it was necessary to give answers to the users to help them understand how to behave regarding the payment of their taxes and tax transactions.

The reasons why this guide arises

For the United States Internal Revenue Service (IRS) it is more than clear that some transactions made with virtual currencies (if not most) are not reported or declared correctly since taxpayers do not know the proper ways to do so and run the risk of falling into infractions that carry fines and penalties later that could even lead to criminal prosecution, that is why measures are being taken to guide users in a better way. For example, in July of this year about 10,000 letters were sent to taxpayers who are carrying out transactions with cryptocurrencies so that they know the correct way in which they should report their transactions and that they can declare them without the need to default on the norms already established.

The implications of this guide

Although what the IRS intends when making this guide available to taxpayers, there are experts who say that their language is not clear enough and for this reason could generate new doubts. Additionally, regarding the issue of hard forks, and the new cryptocurrencies that arise as a result of these, the guide states that they also have fiscal obligations if the taxpayer has control over them, that is, if he can spend them. This could cause some to want to create hard forks and, as a result, new cryptocurrencies in order to generate more tax payments to blockchain users. Given this Jerry Brito, the executive director of the Coin Center media said that this could be an unfortunate consequence for end users.

What do you think about this topic? Have you heard about the issue of handling digital currency taxes?

If you want more information about buying and selling cryptocurrencies you can contact us or write your question at the bottom (comments section).

Image by geralt via Pixabay.com under a creative commons license.


Leave a Reply

Your email address will not be published.