IRS 'Weeks Away from 3 Tax Bills' After Call from Pro-Crypto Activists
America’s top tax authority, the Internal Revenue Service (IRS), will update its cryptocurrency guidelines “in the coming weeks,” per the Wall Street Journal – following a request put forward by United States parliamentarians.
The media outlet says that the IRS’ decision was made after a “bipartisan group of 20 lawmakers” made a request in April, and that the move was “part of a broader push to boost the nascent cryptocurrency industry.”
The IRS is now reportedly “considering at least” three cryptocurrency-related bills that it hopes will “resolve some of the murky legal issues” related to token ownership, trading and business in the United States. Pro-crypto lawmakers allegedly believe that “regulatory clarity is vital to the sector’s growth.”
The IRS is reportedly considering introducing a “Token Taxonomy Act,” which would grant tokens exemption from classification as securities. The same piece of legislation would also seek to grant cryptocurrency a de minimus exemption – meaning that smaller crypto-payments would be exempt from taxation.
A second piece of legislation, provisionally entitled the “Blockchain Regulatory Certainty Act” would reportedly exempt non-financial businesses using blockchain technology from being classified as financial transmitters.
The IRS commented in May that its guidelines would be arriving “soon,” and would also address the tax treatment of forks.
And it seems parliamentarians are concerned that domestic companies could seek to launch their cryptocurrency operations in overseas territories – rather than deal with regulatory headaches in their home country.
Facebook has recently decided to base its Libra project operations in Switzerland – and the social network’s Libra announcement was immediately met with demands from parliamentary groups and regulators to put a halt to the project – with a congressional and senatorial hearing set to take place later this month.
The report continues, “Crypto’s backers in Washington […] worry the United States is falling behind. Japan and Switzerland have developed legal frameworks that have attracted cryptocurrency projects and investment.”
Japan already has a number of cryptocurrency-related laws in place, including several clauses pertaining to taxation. Leading parliamentarians in the country are hoping to push ahead with investor- and business-friendly tax reforms.
And in countries like South Korea, where cryptocurrencies are regulated more rigidly, a number of major companies have been forced to take their crypto-business operations abroad – with Naver and its affiliate Line building a Japan-based business and Hyundai launching a cryptocurrency through a Swiss-based affiliate.