Congressional Blockchain Caucus Members Ask IRS To Clarify Guidance on Airdrops And Forks

The Internal Revenue Service determined a while ago that any consumer to make a profit from their cryptocurrency would be subject to tax payments. However, the guidance over some specifics in the industry – namely token airdrops and forks on blockchain-based networks – has many investors scratching their heads. Eight US reps have stood up to get the answers that the public needs with a letter, following a previous statement in April.

The US representatives involved in the letter include Tom Emmer, Bill Foster, David Schweikert, Darren Soto, Lance Gooden, French Hill, Matt Gaetz, and Warren Davidson.

These individuals pushed the IRS to clarify if any changes made would be applied retroactively or from the current date going forward.

The guidance and laws surrounding the cryptocurrency industry are still rather complicated in the United States. However, it is becoming more and more fundamentally clear that the industry needs more than some tax laws, as eight members of the US House of Representatives jointly issued a letter to the commissioner of the Internal Revenue Service.

According to reports from The Block, reps. Tom Emmer, Bill Foster, David Schweikert, Darren Soto, Lance Gooden, French Hill, Matt Gaetz, and Warren Davidson penned the joint letter on December 20th. In it, they voice their concern over the lack of guidance on token airdrops and blockchain network forks, specifically. The letter follows much of the same path of a request sent earlier this year that urged the IRS to offer more information to taxpayers regarding crypto-related obligations. Emmer filed a bill separately in July to request a “safe harbor” that would protect taxpayers in the event of a fork.

The letter states:

“We wrote in April of this year urging the issuance of guidance for taxpayers who use cryptocurrencies and we are pleased to see that you have issued guidance and addressed many questions we posed. We are, however, concerned that this recent guidance creates many new questions related to the topics it seeks to address, namely forks and airdrops. Moreover, the guidance appears inequitable as it comes almost two years after the Bitcoin and Bitcoin Cash fork and three years after the Ethereum fork.”

The letter also adds that the IRS needs to examine more of the cryptocurrency industry and products, which would help them “to provide guidance to taxpayers as to how income related to all crypto transactions will be treated for tax purposes.” The group also placed blame on the agency for their inability to offer “any clarity for withholding and tax information purposes.”

The letter asked a series of questions, aimed at helping the IRS to better work with the industry. The questions ask the IRS if and when the IRS will clarify the airdrop and fork policies, if and when the IRS plans to set a standard for establishing dominance. Furthermore, if new guidance is implemented, the representatives want to know if it will be applied retroactively or just from this point forward.

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Krystle M
Krystle is an American cryptocurrency blogger that wants to see the future of crypto and blockchain technology evolve. She has been writing about cryptocurrency for about a year, with a special interest in blockchain technology and regulatory measures around the world. While away from writing and learning about the changes in the cryptocurrency industry, she likes to indulge in science fiction novels and further her experience in playing both guitar and piano.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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