AICPA wants IRS to develop Bitcoin tax guidelines

Rage Comment : US tax experts have begun to worry about the lack of digital currency tax rules. Recently, the American Institute of Certified Public Accountants submitted a proposal to the US Internal Revenue Service, hoping to formulate a special digital currency tax guide, clarify the virtual currency tax calculation method, determine the profit and loss of a single transaction corresponding to a certain digital currency, and clarify the valuation of digital currency in the market. This tax method will also apply to daily payment areas. The proposal also specifically mentioned pension accounts, charitable donations, foreign asset declarations and other issues that are difficult to clarify.

Translation: Annie_Xu

The American Institute of CPAs (AICPA) has submitted an initiative to the Internal Revenue Service (IRS), encouraging the U.S. tax agency to explain how Bitcoin and digital currency users can use blockchain technology to handle tax issues.

The initiative, filed on June 10, 2016, asserts that the lack of special treatment for virtual currency tax issues has caused concern among tax experts and lists 10 areas where existing tax guidance needs to be improved.

The proposal comes two years after the IRS issued a notice stating that digital currencies should be taxed as property, meaning users would need to report gains and losses, even if they are used for daily payments.

How the daily use of digital currencies across many industries should be accounted for is the subject of the initiative.

Lewis wrote:

"Taxpayers must identify which virtual currency was used in a transaction in order to determine the gain or loss from that transaction. In many cases, taxpayers are unable to track which virtual currency was used in a particular transaction."

The initiative further explores how digital currency users should evaluate the fair market value of digital currencies in transactions and whether exchanges should be involved in valuation.

Lewis said other considerations include how merchants hold digital currencies and whether charitable donations based on the technology must follow traditional asset valuation rules.

The AICPA also asked for clarification on whether retirement pension accounts can store digital currencies and how to report foreign assets, as digital currencies do not have a specific location.