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IRS Commissioner reminds: Crypto Tax is 'a top enforcement priority'

Legal

bitcoinworld.co.in 28 September 2021 08:54, UTC
  
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The Internal Revenue Service of the United States (IRS) continues to propose new tax regulations to regulate cryptocurrency investments in the United States. The most recent notice outlines tax requirements for the marijuana sector.

The IRS Letter

The IRS Commissioner De Lon Harris signed the letter. Therefore, highlighting the federal agency’s goals for ensuring bitcoin tax compliance among local cannabis growers, distributors, and sellers.

Commissioner Harris stated that the IRS’s top enforcement priority in the cannabis sector is cryptocurrency usage. The announcement will coincide with a recent Senate proposal from July 2021. The announcement aims to tighten taxation and reporting regulations for firms that trade in cryptocurrency. Harris claims that:

“Those who use it [cryptocurrencies] need to understand that the IRS considers it property, and there are gains that are taxable.”

In addition, the IRS commissioner advised cannabis firms to use trustworthy cryptocurrency exchanges to convert cryptocurrencies into US dollars.

High Value Crypto Transactions

The IRS has not specifically requested that firms record high-value crypto transactions. Companies will, however, be required to file Form 8300 for every transaction over $10,000.

Last-minute changes to the Senate’s bipartisan infrastructure accord offered a way to collect $28 billion in cash by taxing crypto investments and transactions.

House of Representatives New Tax Measures

Following the suit of IRS, Democrats in the House of Representatives introduced new tax measures on Sept. 13 to raise the tax rate on long-term capital gains. If passed, the bill will raise crypto taxes by 5% for “certain high-income individuals.”

According to Cointelegraph, the law also proposes a 3.8% surtax on net investment income, increasing the tax rate for chosen investors to 28.8%.

The new tax proposal by IRS will also implement the wash-sale rule, which bans investors from deducting capital gains on cryptocurrencies and other digital assets. Currently, the United States authorities suspect crypto investors to employ wash sales to distort their portfolio’s financial progress.

Read More: Infrastructure Bill to be voted on by the US House of Representatives, this week


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