• IRS official Julie Foerster said the agency could release crypto tax guidance in “12-ish” months.
• Foerster stressed the need for the IRS to work with the cryptocurrency community.
• Currently, cryptocurrencies are considered property, and users are required to report digital assets as part of their annual taxes.
IRS Could Release Crypto Tax Guidance in “12-ish” Months
Julie Foerster, Project Director of Digital Assets at the U.S. Internal Revenue Service (IRS), recently spoke at Consensus 2023 about the state of crypto regulation. She said that while she does not have an exact date yet, her team is hoping to issue crypto tax guidance ready in “12-ish” months. Foerster also mentioned that it is important for IRS to work with the industry and have the right tools and people to do so successfully.
Cryptocurrencies Are Considered Property
For federal tax purposes cryptocurrencies are considered property and not fiat currency, meaning that users must report their digital assets as part of their annual taxes. The U.S. agency considers cryptocurrencies to be convertible virtual assets which can be used as payment for goods and services, digitally traded between users, or exchanged for other currencies.
A Need for Working with Crypto Community
Foerster stressed a need for working with the cryptocurrency community in order to get regulations right and build a plan accordingly. She emphasized that it is essential for the IRS to look at its current skillset as well as what new people they will bring on board in order to make sure they have all necessary tools available when providing guidelines regarding taxation on digital assets such as Bitcoin or Ethereum among others..
Engaging With Crypto Community
The five person team accompanying Foerster at Consensus was reported by her to move through convention center speaking with individuals about taxation matters within their respective jurisdictions along with how the agency can do better in this area going forward. It is expected that these engagements will help them understand how best they can provide guidance when it comes to properly taxing crypto investments along with other issues relating thereto..
Overall, due its complexities and ever evolving nature of cryptocurrencies, it will take some time before proper regulations are put into effect but hopefully we can expect some progress within a year from now according to Julie Foerster’s statements during Consensus 2023 event held last month in Austin Texas