December 5, 2018

Cryptocurrency Tax Compliance Still Confusing as Politicians Demand Answers

On May 2017, the U.S. House of Representatives wrote to the Internal Revenue Service asking them to attend more stringently to the tax compliance guidelines regarding cryptocurrency activities. While the IRS has claimed that its current approach emphasizes flexibility, our national lawmakers see the agency’s approach as less flexible and more unclear.

Cryptocurrency taxes were once a niche issue only raising challenges for a small population of investors. Now, millions of Americans invest in cryptocurrency. And with industry-leading cryptocurrency tax service, CryptoTaxPrep.com, as an important part of the growing Happy Tax brand, Happy Tax franchisees are seeing real benefits from virtual currency.

Cryptocurrency Tax Enforcement

The rapid mainstreaming of cryptocurrency caught many of us by surprise, regulatory agencies included. Notice 2014-21 is the IRS’s policy guidance regarding cryptocurrency. The Notice deems virtual currencies as property for tax purposes, as opposed to another type of asset or foreign currency. Unfortunately, this characterization may pose some significant issues regarding compliance due to the nature of the technology that power most digital coins.

Thus far, there has been an issue of non-compliance in the cryptocurrency tax world. However, this is quickly coming to an end. Earlier this year, the IRS moved forward with its enforcement action against popular cryptocurrency exchange Coinbase. Pursuant to this investigation, Coinbase was forced to share specific details of its account holders with the IRS. This investigation has raised a lot of questions among cryptocurrency users, many of whom are raising legitimate concerns of an audit.

Americans Need CryptoTax Help

The IRS has shown its commitment to regulating and taxing virtual assets since 2014 when it released Notice 2014-21. However, the current tax policy has proven confusing and frustratingly unclear – even to U.S House of Representatives. Now that lawmakers have called for more stringent guidelines, Americans will be seeing more and more enforcement of national cryptocurrency taxes.

Cryptocurrency users should not be unfairly affected by unclear tax guidelines. However, this, unfortunately, goes part-and-parcel to changes in investment trends – while the IRS figures out what to do, some of us are simply left twisting in the wind. Fortunately, Happy Tax has recognized this growing market need and built a new branch specifically designed to provide American taxpayers with the cryptocurrency tax help that they really need.

Happy Tax loves its customers, and we’re always working hard to make sure we’re meeting the needs of the modern taxpayer. Our franchise owners benefit from this innovative approach, and they can always rely on the top-quality tax planning and preparation services provided by the in-house Happy Tax team of licensed CPAs.

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