TAX PROFESSIONALS ASK FOR TAX CHANGE
December 6, 2022 - Douglas Myser
Tax Professionals ask for tax change. The IRS has asked for public comments so it could grant further guidance on the question of the taxation of cryptocurrency. One of the reasons for this is the need for further revenue, due to the Covid pandemic. The other is that China is moving towards a all cash economic system, which will give it advantages over the U.S., and the Treasury Department is now studying the implementation of a cashless system. So on recent IRS tax forms, the question of whether you had any cryptocurrency was being asked of taxpayers. This is obviously in anticipation of the eventual regulation and taxation of cryptocurrencies, which currently are not taxed unless sold. Tax Professionals ask for tax change.
The tax form has also been changing, as the learning process of crypto has given new meaning to what in fact it is. One of the recommendations was to make "virtual currency" as defined in the Form 1040 instructions consistent with that of the official IRS guidance, which is in Revenue Ruling 2019-24, and IRS Notice 2014-21. These definitions differ is some ways. There are three attributes of virtual currency--that it functions as a unit of account, a store of value, or as a medium of exchange"-- with that conjunction "or" implying that if any one of the three functions applies, the transaction may have involved virtual currency. However, Revenue Ruling 2019-24lists these functions identically and they are all joined by the word "and", implying that all three three functions must be present. If you have a tax problem due to Offshore issues, we understand the Tax Treaty implications, and can help you out. If you have a cryptocurrency questions, or know that it is going to be regulated and are worried about the tax implications, feel free to call for Tax Resolution Services with any questions at all.