The Internal Revenue Service (IRS) of the United States is soon going to update its current guidance (2014) on digital currencies in the following weeks, as per the reports published by the Wall Street Journal. The move has been taken following the request from 20 lawmakers of the bipartisan group back in April. It is said to be a part of the wider push to improve the budding industry of digital currency.
According to the 2014-12 IRS Notice, Bitcoin (BTC) along with other cryptos are virtual currencies that are convertible without the status of a legal tender. These assets are considered as either a property or an asset. But a letter addressed to Representative Tom Emmer expressed that the updated IRS guidance would address the tax calculation techniques as well as other issues. In fact, the US Congress is contemplating to pass a minimum of 3 bills that would focus on resolving legal issues associated with digital currencies.
It must be noted here that policymakers have previously acknowledged the fact that compared to the crypto industry in other nations such as Switzerland and Japan, the one in the US trails behind. That was one of the reasons for introducing the Token Taxonomy Act of 2019 in April. This Act made it necessary for the SEC (Securities of Exchange and Commission) to alter the Securities Act of 1933 as well as the Securities Exchange Act of 1934 in a way that excluded cryptocurrency assets from what is referred to as security.
Other than that, the month of February saw the introduction of the Blockchain Promotion Act of 2019 for exempting the blockchain-backed and non-financial businesses from getting classified as the money transmitters. It also aimed at creating a working set which would determine the definition of the blockchain technology based on a consensus.
Todd Young, the Senator, stated that blockchain technology has all the capabilities of bringing sustainable economic growth in a variety of American industries. Apart from economic and financial benefits, blockchain technology can also offer social and humanitarian support in the developing nations under the leadership of America.
Prior to this, there were reports that indicated the IRS was about to begin auditing taxpayers owning crypto assets. Apparently, a taxpayers’ list was also made that included those who underreported or failed entirely to report their crypto-sourced incomes. There was also a buzz that identified citizens would be sent a notice soon.