Uncle Sam finally issues guidance on cryptocurrency reporting
- By staff writer
The U.S. Internal Revenue Service has issued long-anticipated guidance on how Americans should report their cryptocurrency assets and transactions, and included details of a new "checkbox" that taxpayers must consider when filling out their 1040s.
The IRS guidance, which has been distributed in the form of several documents that have also been posted on the department's website, was described as the first fresh guidance on the asset class's reporting requirements since 2014.
Among the documents issued was an eight-page list of frequently-asked questions, which noted that except where otherwise stated, the answers given applied "only to taxpayers who hold virtual currency as a capital asset" -- a definition for which, taxpayers are told, may be found elsewhere in the IRS's online archives.
The IRS's guidance comes as the business of monitoring the use of cryptocurrencies, for tax and other purposes, continues to be much-discussed by regulators around the world, even as the sector's popularity among investors and enthusiasts has been rising and falling.
In announcing its "additional guidance on tax treatment" of "virtual currency", and reminding taxpayers of their "reporting obligations", the IRS said it was seeking "to help taxpayers better understand their reporting obligations for specific transactions" involving cryptocurrencies.
Chuck Rettig, IRS commissioner, said in a statement that the IRS was "committed to helping taxpayers understand their tax obligations in this emerging area,” and that the new guidance was expected to "help taxpayers and tax professionals better understand how longstanding tax principles apply in this rapidly changing environment."
He added: "We want to help taxpayers understand the reporting requirements as well as take steps to ensure fair enforcement of the tax laws for those who don’t follow the rules.”
To see the IRS's overview of its new guidance, click here.
To see the IRS's FAQs on virtual currency transactions, click here.
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