House Ways and Means Committee Chairman Kevin Brady, R-Texas, called on the IRS Wednesday to update its taxpayer guidance on virtual currencies, as lawmakers question the enforcement actions taken by the IRS against individuals holding such currencies.
“While the issues surrounding virtual currencies are complicated and ever evolving, a key component of the IRS’ duties as the nation’s tax administrator is to assist taxpayers in understanding what their tax obligations are and how they may best meet them,” wrote Brady in his letter to IRS Acting Commissioner David Kautter.
“A failure to put forth adequate guidance severely hinders taxpayers’ ability to do so. The IRS has had four years to work through these issues since its preliminary guidance was issued, providing more than adequate time for the IRS to thoughtfully consider what additional information is needed.”
Brady noted that the Wednesday letter follows a letter he along with other lawmakers sent in May 2017 to the agency raising questions about the enforcement actions the IRS has taken against individuals holding virtual currencies.
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“Since the emergence of virtual currencies, the IRS has struggled with how to treat virtual currencies for tax purposes and the amount of guidance necessary to assist taxpayers in understanding their tax obligations,” Brady wrote in the Wednesday letter.
In March 2014, the IRS began working to clarify tax issues related to virtual currencies by issuing guidance indicating that virtual currencies would be treated as property for tax purposes.