About 21 total representatives sent a two-way letter to the U.S. tax authority requesting steering on the way to report cryptocurrency taxes. The action took place before the filing dead-point for federal income tax returns by 15th April, 2019.
Within the letter, the representatives mentioned the IRS’s earlier efforts to determine a tax treatment for digital assets. The letter added that the IRS’ approach to digital property and currency transactions was one among the foremost serious issues encountered by taxpayers earlier in 2008.
The lawmakers conjointly added that the IRS guidelines in 2014, but the Inspector General for Tax Administration found it lacking and suggested clear guidelines for the way various crypto currencies are treated within the tax regime.
The letter alleged the IRS to offer guidelines on tax consequences and basic reporting necessities for taxpayers that use digital currencies, claiming that there’s still “substantial ambiguity on several necessary questions about the federal taxation” of the emerging asset.
Moreover, the letter asks the IRS to specify acceptable strategies for calculating the cryptocurrencies’ cost basis, cost basis assignment and lot relief, along with the tax treatment of cryptocurrency hard forks, citing Bitcoin’s [BTC] fork Bitcoin Cash [BCH] that took place earlier in August 2017.
The letter ended that “it isn’t reasonable to expect taxpayers to satisfactorily answer these advanced complex queries while the IRS remains silent.”
However, American personal finance firm named ‘Credit Karma’ disclosed that the total number of its filers who reported short-run crypto losses surged fivefold within the 1st month of this year over the same period in 2018. Earlier also, Credit Karma revealed a survey report showing that solely 53% of the American citizens planned to report their gains and losses for taxes associated with crypto-currencies, whereas around 35% of respondents ‘claimed‘ that they suffered losses by trading cryptocurrencies and thereby won’t be reporting them, on their tax returns.