While cryptocurrency generally has a complicated relationship with many regulatory bodies, one of its most endearing is the one with the Internal Revenue Service in the United States. This is because cryptocurrency and tax are complicated issues on their own and this is coupled with the fact that the IRS has yet to put out a comprehensive tax code with regards to cryptocurrency. In 2018, a US congressman sent an open letter to the IRS asking for more clarification on crypto-related tax even as crypto sees widespread use.
Now, over a year later, 8 US Congresspeople have jointly sent an open letter to the Internal Revenue Service once again calling for clarification on crypto-related tax.
The letter is dated December 20, 2019, and has the backing of 8 US Congresspeople.
“We wrote in April of this year urging the issuance of guidance for taxpayers who use cryptocurrencies and we are pleased to see that you have issued guidance and addressed many questions we posed. We are, however, concerned that this recent guidance creates many new questions related to the topics it seeks to address, namely forks and airdrops,” the letter says.
It should be noted that the IRS did put out some crypto-related tax guidelines in October 2019 which detailed, for example, what actions will be taken in the case of an airdrop. However, the letter by the congresspeople states that many of the hypothetical scenarios used as a reference within the tax ruling and not applicable in real life and as such offer little help for cryptocurrency holders. More guidelines have been demanded on issues such as crypto-based income, interest earned on the deposit of crypto assets as well as futures trading.
“[W]e are concerned that the form of the guidance appears to indicate that this is ‘established’ law. We hope that the IRS recognizes this area as new and developing and will allow for reasonable interpretations in advance of the issuance of the most recent guidance,” the letter says.