The governments love to collect taxes. It is no surprise that cryptocurrencies like Bitcoin, owing to their widespread adoption as digital assets have attracted taxes as well, especially in the United States. In the middle of the US tax season, the cryptocurrency community is in a fix due to lack of proper information and guidance for filing Bitcoin-related taxes. The Chamber of Digital Commerce, a leading trade association promoting the use of cryptocurrency and blockchain technology has partnered with the law firm, Steptoe & Johnson LLP to create a Digital Assets Tax Policy Coalition to address the issues.
The Digital Assets Tax Policy Coalition, based out of Washington DC will be working on framing effective and efficient tax policies for the digital currency market. The coalition will help individuals and businesses gain a better clarity of taxation policies applicable for cryptocurrencies following its categorization as property by the Internal Revenue Service. The formation of Digital Assets Tax Policy Coalition was announced earlier yesterday in a press release.
The member companies of the Chamber of Digital Commerce will be actively involved in the policy deliberations, providing their valuable inputs. These member companies range from leading cryptocurrency exchanges to wallet providers, crypto-payments processing platforms, distributed ledger technology businesses and more. Steptoe & Johnson will be acting as the legal counsel, offering its perspective on the framed tax policies. As the coalition strives to strike a balance between the government entities and businesses, the resulting cryptocurrency tax policy will help IRS create a strategic plan for the virtual currency program as recommended by the Treasury Inspector General for Tax Administration. It will also serve as a guideline for the third-parties to create tools and application that help individuals and businesses factor in their cryptocurrency transactions and holdings into the tax calculation.
Perianne Boring, the president and founder of the Chamber of Digital Commerce was quoted in the press release stating,
“Clear tax treatment for digital assets is essential to ensure robust growth of this important sector.”
Even Jason Weinstein, a partner at Steptoe and co-chair of Steptoe ‘s Blockchain and Digital Currency practice offered similar views. He said,
“We are proud to be working with the industry’s leading companies to engage with policymakers on an issue of vital importance to the sector. Tax solutions that allow the IRS to do its job without resorting to actions such as a John Doe summons will be of benefit to all.”
The success of Digital Assets Tax Policy Coalition will create a much simpler taxation and regulatory environment for businesses and even individuals using cryptocurrencies and other digital assets. They can expect a simple, hassle-free tax season in the coming year. It will also prevent IRS and government from overreaching in the name of tax compliance like they did in the case of Coinbase recently.
Ref: Press Release | Image: Shutterstock