Bitcoin News — IRS
Posted by Ana Berman on
An advisory committee urges the IRS to review crypto guidelines that were issued back in 2014.
An advisory committee of the U.S. Internal Revenue Service (IRS) wants the agency to provide additional guidelines for the taxation of crypto transactions, according to a 2018 general report published Oct. 24.
Although in 2014 the IRS had already issued commentary specifically on digital currencies, recommending they be treated as a property, the Information Reporting Program Advisory Committee (IRPAC) believes that crypto-specific taxation should be reviewed due to the growing public interest in cryptocurrencies.
The crypto industry itself and those who work in taxes often still are uncertain when it comes to the “tax consequences” of cryptocurrency transactions, the report goes on. The advisors further list the main questions surrounding the current taxation scheme:
“Many industry and tax practitioners still question other tax consequences of cryptocurrency transactions. For example: Can cryptocurrency be considered a specified foreign financial asset? How is the basis determined for cryptocurrency that is sold? Does broker reporting apply to cryptocurrency transactions?”
Furthermore, in the discussion section of the report, the IRPAC cites Fundstrat Global Advisors research published back in April 2018, which estimated that the potential tax liabilities of cryptocurrencies could form up to $25 billion.
The data was based on $92 billion of taxable gains for U.S.-based cryptocurrency investors. Based on the Fundstrat report, the IRPAC came to a conclusion that at least 50 percent of tax liabilities from cryptocurrency transactions in the U.S. could have gone unreported.
Furthermore, the advisory committee admits that some crypto investors may avoid taxes by using foreign crypto exchanges or trading digital currencies that provide anonymity. For those reasons, the report states, U.S. regulators have to cooperate with foreign companies and gain information from other governments willing to cooperate.
In April, shortly before the deadline to file taxes in the U.S. on April 17, the tax platform Credit Karma revealed that less than 100 people had reported capital gains from crypto investments out of the 250,000 tax filers in total on the platform. In 2015, the IRS reported that only 802 American taxpayers mentioned crypto investments in their tax filings.
In September of this year, a group of U.S. lawmakers urged the IRS to clarify the taxation rules for cryptocurrency, stating, similarly to the IRPAC, that the preliminary guidance issued four years ago was outdated, as the crypto industry had significantly changed since then.
Posted by Nikhilesh De on
Posted by Helen Partz on
A crypto coalition led by Ripple plans to pay D.C. lobbyists to impact the government’s stance on cryptocurrencies.
According to the report, the coalition of San-Francisco-based crypto firms is planning to pay Klein/Johnson Group, a bipartisan lobby group, to assist the crypto and blockchain community in conveying to regulators that the industry needs support from the government.
The new group, called the Securing America’s Internet of Value Coalition, aims to soften the government’s stance in order to encourage innovation and support competition in the ecosystem of global crypto markets.
The coalition, together with the lobby group, will raise issues with Congress, as well as the Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), and other agencies that have relations to cryptocurrencies.
According to the preliminary agreement, the fintech lobby group Klein/Johnson will reportedly receive around $25,000 a month and 10,000 in Ripple (XRP) from the coalition. As Bloomberg reports, the company is planning to convert the cryptocurrency into dollars by the time it discloses the payments on federal lobbying forms.
Along with Ripple, as well as independent foundation RippleWorks, the coalition will also feature digital payments firm Coil, crypto investment company Yaka, and PolySign, a startup that is set to launch a crypto custodian.
Chris Larsen, executive chairman of Ripple, commented that while the company admits that the matter is “really complicated,” due to a great deal of “misinformation,” there is still “a lot of interest in this topic in D.C..”
The companies’ lobbying move follows the increased attention of Congress and other agencies like the SEC towards cryptocurrencies. Yesterday, a group of Congress lawmakers sent a letter to the SEC, urging the regulators to provide more clarity in regard to cryptocurrencies. Specifically, the lawmakers have reportedly requested the SEC to confirm whether digital tokens can be identified as securities or not.
On September 26, the U.S. House of Representatives passed a bill to establish a crypto task force to combat terrorist use of cryptocurrencies.
In June, SEC chairman Jay Clayton claimed that major cryptocurrency Bitcoin (BTC) is not a security due to its function as a replacement for sovereign currencies. Around a week later, a senior SEC official claimed that the top altcoin Ethereum (ETH) will be not regulated as a security, while Ethereum co-founder has previously denied that ETH was ever a security.
Concerning Ripple, in April, the company’s chief market strategist Corey Johnson stated that Ripple is “100 percent clear” and not a security since it does not meet the standards of what a “security is based on the history of court law.”
Posted by Marie Huillet on
New research into publicly available records shows that U.S. government agencies have tripled their investment in blockchain intelligence firms this year.
New research into publicly available records shows that U.S. government agencies have tripled their investment in blockchain intelligence firms this year, according to a Diar report published September 24.
The analysis can equally be used as a “digital trail” that provides law enforcement agencies with actionable intelligence, allowing them to potentially counter illicit activity that would otherwise remain concealed behind pseudonymous crypto wallet addresses.
U.S. government agencies reportedly account for $5.7 million out a collective total of $28.8 million that has been invested in blockchain analysis firms to date, Diar states.
Funding from U.S government. agencies in blockchain analysis firms. Source: Diar.co
According to Diar, the vast majority of government deals have been contracted to New York- based blockchain intelligence firm Chainalysis, which has signed deals with government agencies totalling $5.3 million (out of a total of $17.6 million from all its investors).
Chainalysis’ largest contract was reportedly signed with the Internal Revenue Service (IRS) in August of this year for around $1.6 million. According to Diar’s report, Chainalysis is followed by rival firms Elliptic and CipherTrace in terms of overall investment.
The IRS reportedly accounts for the highest share of total government expenditure on blockchain intelligence, followed by the U.S. Immigration and Customs Enforcement (ICE), as Diar’s consolidated data shows:
U.S government agencies’ expenditure on contracts with blockchain analysis firms. Source: Diar.co
While Diar notes that the IRS, ICE, and Federal Bureau of Investigations (FBI) have a combined 85 percentage of the total expenditure, several other government agencies have also sought smaller contracts with blockchain intelligence firms, including securities and commodities regulators.
Diar’s Sept. 24 report also included a section devoted to Initial Coin Offerings (ICO), which have reportedly raised double in investments in 2018 ($12 billion) as compared with last year. However, Diar’s collected statistics have also shown that 70 percent of tokens “are now valued at less than what was raised during their ICO.” The report notes that 402 out of 562 projects that collectively raised over $8.2 billion are now worth $2.2 billion — a hefty $6 billion market capitalization loss.
As a recent Cointelegraph analysis piece has outlined, the role of third-party blockchain intelligence firms was brought into the spotlight by the recent high-profile indictment from the U.S. Department of Justice (DoJ) against Russian officials who allegedly used crypto to fuel efforts to interfere in the 2016 U.S. presidential elections.
One of the most “heavily interviewed” experts in the wake of the indictment news was Jonathan Levin, co-founder and COO of Chainalysis, who declined to comment on the firm’s official involvement in the case.
Regulations Roundup: U.S. Govt. Pays $5.7 Million for Blockchain Analysis, Amit Bhardwaj’s Assets Seized
Posted by Samuel Haig on
In recent regulatory news, a report published by Diar has found that U.S. government agencies have paid approximately $5.7 million USD to blockchain analysis contractors, India’s Enforcement Directorate has seized $5.9 Million worth of assets linked to the case of Amit Bhardwaj, and the Bank of International Settlements finds cryptocurrencies to “not, at this point, […]
The post Regulations Roundup: U.S. Govt. Pays $5.7 Million for Blockchain Analysis, Amit Bhardwaj’s Assets Seized appeared first on Bitcoin News.
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