June 17, 2024

US Internal Revenue Service will clarify cryptocurrency management

US Internal Revenue Service will clarify cryptocurrency management

Members of the U.S. House of Representatives have sent a letter to the Commissioner of the Internal Revenue Service (IRS) requesting that guidance be expanded and clarified regarding the concepts of token airdrops and hard forks.

Letter written by representatives of Tom Emmer,Bill Foster, David Schweikert, Darren Soto, Lance Gooden, French Hill, Matt Getz and Warren Davidson, dated December 20, expresses members' concerns about the lack of clarity in the guidance on these points. Let us recall that in July, Emmer filed a bill whose purpose was to create a “safe harbor” for taxpayers whose assets were forked during the implementation of a hard fork.

In particular, the group questionedan approach that, in their opinion, “creates potentially unreasonable tax liabilities and an administrative burden for users of this innovative technology”.

Members are calling on the regulator to take a closer look at the cryptocurrency ecosystem of products and services, including futures, retirement accounts and deposits.

«The IRS should provide guidance to taxpayers regarding how income from crypto transactions will be treated for tax purposes.»

Regarding specific issues, the letter says the following:

  • Does the IRS intend to clarify the concept of airdrops and hard forks to reflect the actual nature of events in the cryptocurrency ecosystem? When can we expect this clarification to be published?
  • Does the IRS intend to clarify standards for determining dominance and control over assets obtained during a hard fork?
  • Does the IRS intend to amend the current guidance or will additional guidance be issued in the form of a notice or commentary?

«Creating the right tax policy inCryptocurrency is a top priority for us, and we are pleased that Congress is involved in addressing this critical issue for users», — wrote Niral Agrawal, communications manager for Coin Center, in a blog post outlining the letter.