This week in a letter to IRS acting commissioner David Kautter, Senator Kevin Brady, R-Texas, chairman of the Committee on Ways and Means, and other lawmakers strongly urged the IRS to issue updated, robust guidance regarding the taxation of virtual currency. Brady's letter expressed concern over increased IRS enforcement actions in the face of inadequate guidance over the past four years since the IRS's preliminary notice. The lawmakers urgently requested a written response from the IRS outlining where the IRS is in its efforts, what the IRS intends to cover and a timeline for the release of such guidance. The lawmakers also stated they intend to ask the Government Accountability Office to undertake an audit on the matter.
Two days after Brady's letter to the IRS, Congressman Tom Emmer, R-Minn., announced three bills in support of blockchain technology and digital currencies. Recently named co-chair of the Congressional Blockchain Caucus, Rep. Emmer declared the United States should prioritize accelerating the development of blockchain technology and create an environment that enables the American private sector to lead on innovation and further growth. The proposed legislation includes the following:
- A resolution expressing support for the blockchain technology industry and development of these technologies in the United States.
- A bill that would provide a safe harbor protecting software developers and providers of blockchain services that do not control consumer funds from certain licensing and registration requirements.
- A safe harbor applicable to taxpayers who received forked convertible virtual currency that would protect such taxpayers from certain penalties and additions to tax until Treasury issues regulations or guidance on the tax treatment of hard forks.
On the international stage, the Financial Action Task Force (FATF) is reportedly getting closer to the establishment of a global set of anti-money laundering standards for cryptocurrencies to resolve what some have described as a "patchwork quilt" of current AML standards. And in a case brought by the Commodity Futures Trading Commission, a Massachusetts District Court recently ruled that virtual currency is a commodity subject to the Commodity Exchange Act.
For more information on this week's post, please see:
- US House Letter to IRS re: Taxation of Crypto
- Emmer Spearheads Groundbreaking Legislation to Support Blockchain Technology and Digital Currencies
- International Anti-Money Laundering Standards for Crypto Expected in October
- Massachusetts District Court nixes My Big Coin Pay's attempts to dismiss a lawsuit and sides with the CFTC in finding that virtual currencies are commodities
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