The IRS officially prioritized tax guidance issuing on the topic of cryptocurrencies in a letter issued on May 16. This appeared as a request that was done by 21 Congress representatives in order to provide true clarity on tax reporting on holdings in cryptocurrencies.
Charles Rettig, IRS Commissioner, declared that the agency made this a priority and wants to issue proper guidance. Instructions are said to specifically cover various issues like acceptable calculation cost basis methods, cost basis assignment methods and fork tax treatments.
It is also mentioned that virtual currency is now treated as property, so the tax principles applicable to transactions of properties apply to the transactions of cryptocurrencies. It is also revealed that the IRS works with important players in the industry to define needed guidance areas.
Three bills were introduced in the past in order to support cryptocurrencies and blockchain technology. The most important part of them is the mention of the fact that taxpayers cannot possibly comply with laws in the event that they are not clear.
The fact that the IRS officially mentioned that it wants to prioritize guidance for cryptocurrency taxation is an important step in being able to fully legally trade digital assets. At the moment, the law in the US is quite bleak, with numerous things that cannot be properly understood even by attorneys.