IRS Urged To Clarify Bitcoin Taxation Guidelines

Taxation of Bitcoin is always a topic of substantial debate, as it would require cryptocurrency to be labeled as money or currency. Over the in the US, that debacle may finally see a solution as the CPA is pushing the IRS for guidance on how Bitcoin taxation should be handled moving forward.

Taxation is Theft, But The IRS Thinks Otherwise

TheMerkle_Taxation Bitcoin

Consumers and investors in the United States would like some clarifications to how they should look at Bitcoin taxation. Right now, there is no specific tax treatment of cryptocurrency in place in the US, and it rather concerns for tax professionals. Clarification would be a positive thing, albeit cryptocurrency enthusiasts may argue there should be no tax on Bitcoin to begin with.

It is not the first time discussions regarding Bitcoin taxation in the US pop up. The IRS had unveiled a plan to tax cryptocurrency over two years ago, yet very little has been undertaken ever since. Moreover, their ruling of seeing Bitcoin as property did not sit well with most holders, as they would have to report losses and gains themselves for every single Satoshi.

A lot of people use Bitcoin on an everyday basis, and it is unclear as to how taxation works in this regard. Additionally, the everyday consumer may have some difficulty when determining which lot of coins was used during particular transactions. It is quite a hassle to figure out these details, and the average tax professional will have an even harder time doing so.

But other questions need to be answered as well. For example, how should users determine the market value of Bitcoin at the time of the transaction? Should they use an average price index or the local exchange rate value? Proving this will be an even bigger challenge as hardly anyone screenshots every transaction taking place with its associated fiat currency value at that time.

There is also the topic of funds controlled by merchants to take into account. Charitable organizations have to adhere to taxation guidelines as well, although the regulation is not clear in this regard either. In the end, there is a lot of explaining to do by the IS, yet it remains to be seen if and they decide to do so.

Source: Scribd

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