Members of the United States House Ways and Means Committee sent a letter to the Internal Revenue Service (IRS) requesting information regarding the status of any efforts by the agency to issue more broad guidance on tax obligations for those who hold or transact cryptocurrencies.
To date, the six-page Notice 2014-21 issued in March of 2014, and classified as “preliminary guidance” by the IRS Commissioner, has been the only official guidance provided to the public. While this not only leaves taxpayers uncertain of their full tax obligations, it also implies more broad guidance would be issued at a later time.
Having reached out once last year in May and now again in September 2018, the members of Congress are pressing the IRS to “expeditiously issue more robust guidance clarifying taxpayers’ obligations when using virtual currencies.”
“More than a year after our initial letter, the IRS continues to expand its enforcement activities without issuing any further guidance for taxpayers. We therefore write again today to strongly urge the IRS to issue updated guidance, providing additional clarity for taxpayers seeking to better understand and comply with their tax obligations when using virtual currencies.”
The letter went on to say:
“While the Committee appreciates the IRS’s need to undertake enforcement actions to ensure that taxpayers generally meet their tax obligations, in this case, we are concerned that the IRS is seeking to enforce guidance that does not adequately advise taxpayers of their tax obligations when using virtual currencies.”
The IRS was also informed by this letter that the Government Accountability Office (GAO) will be asked to “undertake an audit” in order to assist the Committee in better understanding this matter.
After four years, lawmakers are surely hoping to see significant progress by the agency to meet their obligation of providing more broad and clear guidance regarding cryptocurrencies. With enforcement based on only preliminary guidance increasing, taxpayers, too, should be hopeful that the IRS will, before half-a-decade’s time, finally issue clarity on tax obligations.