Puzzling Bitcoin Tax Regulations are Causing Quite the Cryptocurrency Community Stir
Andrew Yang is a 2020 presidential candidate who has his sights set on crypto reform. His webpage features a brief titled Crypto/Digital Asset Regulation and Consumer Protection. Therein, he notes that there is an absence of a national framework for crypto and digital assets. At the state level, their patchwork of varying regulations poses a challenge to the US crypto market as well.
“It’s time for the federal government to create clear guidelines as to how cryptocurrencies/digital asset markets will be treated and regulated so that investment can proceed with all relevant information.”
The brief identifies three problems to be solved, which are: first, cryptocurrency and digital assets have developed faster than regulations; second, states have conflicting and varying regulations concerning digital assets; and third, there is uncertainty as to what regulatory framework will develop in the United States, thereby causing investment to fall behind that of other countries.
Yang then identifies the goal, which is to
“create clear guidelines in the digital asset world so that businesses and individuals can invest and innovate in the area without fear of a regulatory shift.”
Yang is not the only politician who sees cryptocurrency ambiguity as an issue. Before tax day, Congressman Emmer of Minnesota and several other chairs of the Congressional Blockchain Caucus sent a bipartisan letter to the Internal Revenue Service requesting guidance on how to report virtual currency before tax day. The last guidance from the IRS took place in 2014, in which it indicated that digital assets are to be treated as property. Since then, there has been a great lack of clarity, making it more difficult for cryptocurrency and digital asset holders. As Emmer pointed out well,
“Guidance is long overdue and essential to proper reporting of these emerging assets. The bipartisan support this letter has received should send a clear message to the IRS that clear guidelines for reporting virtual currency are necessary. My colleagues and I are optimistic that the IRS will issue the guidance needed for taxpayers struggling with these reporting requirements.”
Those who are interested in reading the full letter can do so here.