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Text | Suixin

Editor | Lu Xiaoming

According to a May 16 response from IRS Commissioner Charles Rettiga lettera letter

Rettig noted in the letter that virtual currencies are considered property and that existing tax principles that apply to property transactions also apply to cryptocurrency transactions. He further revealed that the Inland Revenue Department has been working with industry players to define areas that require guidance.

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IRS inaction, don't expect taxpayers to voluntarily pay taxesThe letter is in response to an open letter written by 21 members of Congress to the Internal Revenue Service (IRS). existletter to tax authorities

In it, the delegates claimed that “substantial ambiguity remains on some important issues of federal taxation” about the nascent asset class, providing clarity on tax returns on cryptocurrency holdings.

Specifically, the letter asks the IRS to specify acceptable methods for calculating the cost basis of virtual currencies, cost basis allocation and volume relief, and the tax treatment of crypto forks, citing the August 2017 Bitcoin split. fork problem.

The letter concluded: "It is unreasonable to expect taxpayers to answer these complex questions to their satisfaction while the IRS remains silent."

Since 2018, there has been constant news about members of Congress asking the IRS to clarify digital currency tax rules.

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Cryptocurrency is the new tax haven

While the tax commissioner said virtual currencies are considered property, existing tax principles that apply to property transactions also apply. But the current tax principles have a lot of loopholes.The IRS released cryptocurrency tax guidance in 2014.According to the IRS2014 guidelines,

Trading cryptocurrencies for currencies such as U.S. dollars is a taxable event. Cryptocurrency mining is also taxable as it is considered a form of income. In contrast, P2P transfers, small gifts, purchases of cryptocurrencies, etc. are not taxed.4 Ways How to Avoid Taxeswait.

wait.an article entitled"Cryptocurrency is the New Tax Haven"

Therefore, the digital currency platform has become a new tax haven. As long as you sell these coins or don't exchange them for legal tender, you don't have to pay taxes to the US government. Because the United States regards cryptocurrency as an asset and only pays taxes when it is sold. "

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There are tax cuts for investment losses, but few people knowAccording to credit scoring providerIn 2018, U.S. investors who invested in Bitcoin lost a total of $1.7 billion, an average of $718 per person. The results also revealed that 61% of Bitcoin investment losers were unaware that they reported their losses to the IRS and could claim a tax deduction.

in addition,in addition,Bloomberg has reported

, a former Wall Street trader borrowed $100,000 using Bitcoin as collateral. Avoid taxes on cash while keeping their cryptocurrencies. Using cryptocurrencies as mortgages can avoid taxes, but Bloomberg also mentioned that the IRS has not addressed the issue of loans backed by cryptocurrencies, and cryptocurrencies also face regulatory and high-risk issues of their own.

What happens if users don't report their crypto trading activity? The reality is, no one knows for sure if you have a deal. Officials are also gradually tightening regulations in this area.

The US Internal Revenue Service publicly stated on July 2, 2018 that one of their core activities and annual focus is the taxation of virtual currencies, and failure to make corresponding tax reports will be considered tax fraud.

But Rep. Emmer said "taxpayers can only obey the law if it is clear."