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U.S lawmakers probe the IRS regarding a comprehensive cryptocurrency strategy

“More than a year after our initial letter, the IRS continues to expand its enforcement activities without issuing any further guidance for taxpayers,” read the opening paragraph of an open letter sent by U.S lawmakers to the IRS regarding a comprehensive cryptocurrency strategy which the Internal Revenue Service (IRS) has, according to the law makers, failed to compile.

The letter was addressed to David Kautter, acting commissioner, Internal Revenue Service. The letter was a follow-up on another letter which the lawmakers sent to the IRS last year. Their current letter, dated September 19, 2018 notes that the IRS is, instead of issuing guidelines aimed at the cryptocurrency space, expanding ‘its enforcement activities’.

The lawmakers are asking the Internal Revenue Service to provide “additional clarity for taxpayers seeking to better understand and comply with their tax obligations when using virtual currencies.” The lawmakers – representative Kevin Brady, David Schweikert, and Lynn Jenkins – are concerned that the IRS, despite issuing “only preliminary guidance on this issue” is making enforcement a priority.

“While the committee appreciates the IRS’s need to undertake enforcement actions to ensure that taxpayers generally meet their tax obligations, in this case, we are concerned that the IRS is seeking to enforce guidelines that do not adequately advise taxpayers of their tax obligations when using virtual currencies,” read the letter.

The lawmakers went ahead to urge the IRS to speed up their compilation of more comprehensive guidelines on how those trading in cryptocurrency should handle tax issues among other things. They also indicated that they will be calling upon the ‘Government Accountability Office to undertake an audit on this matter.”

According to the lawmakers the IRS has had more than enough time to issue a comprehensive cryptocurrency guideline given that it’s the country’s tax administrator.

As the U.S lawmakers probe the IRS regarding a comprehensive cryptocurrency strategy, do you think the lack of a detail crypto strategy from the country’s tax administrator has left U.S crypto traders stranded concerning crypto taxation?

Let us know your thoughts in the comments section below.

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