IRS Recruits Crypto Experts and Clarifies Reporting Requirements for Digital Assets
Summary:
The U.S. Internal Revenue Service (IRS) has hired two private sector cryptocurrency tax experts to focus on digital assets, alongside reminders for citizens to report all income from digital assets. Sulolit Mukherjee and Seth Wilks were brought on as executive advisors, with the aim to establish service, enforcement, and compliance programs for digital assets. Funds from the Inflation Reduction Act (IRA) will be used to ensure compliance in these emerging areas. The IRS also clarified that U.S. taxpayers are not required to report cryptocurrencies in wallets or moved between wallets owned by the same person.
The U.S. Internal Revenue Service (IRS) has recently called on two specialists in cryptocurrency taxation from the private sector, intending to concentrate on digital assets. January 29 marked the beginning of the official tax season in America. Consequently, the IRS has been continuously reminding citizens to disclose all profits from cryptocurrencies and digital assets, such as nonfungible tokens (NFTs). This includes profits from crypto gained as rewards or through staking and other such avenues. The IRS recently welcomed Sulolit Mukherjee and Seth Wilks to their team as executive advisors. These two are said to bring a wealth of knowledge from their experiences in the tax and crypto sectors, and they'll be guiding IRS efforts in establishing service, reporting, enforcement, and compliance programs centred on digital assets. IRS Commissioner Danny Werfel is of the opinion that hiring experts from the private sector will be beneficial in setting up a digital assets infrastructure that aligns with everyone's needs. The IRS intends to channel funds from the Inflation Reduction Act (IRA), a federal law designed to limit inflation, to ensure compliance in developing areas like digital assets. It's crucial to mention that U.S. taxpayers aren't mandated to report cryptocurrencies stored in wallets, moved between wallets owned by the same individual, or bought with fiat currency. In an unexpected move on January 17, just before the tax season began, the IRS stated that cryptocurrency transactions over $10,000 are not required to be reported. After releasing a regulatory framework, the department plans to put this rule into effect. This decision overturned a law that came into effect on January 1, mandating all U.S. businesses to disclose cryptocurrency transactions exceeding $10,000. The IRS clarified that currently, when calculating whether a single cash transaction (or related multiple transactions) hits the reportable threshold, digital assets don't need to be considered. The U.S. House Financial Services Committee (FSC) also pointed out several underlying problems with the "badly designed digital asset reporting requirements" passed on January 1.
Published At
2/28/2024 11:01:11 AM
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