IRS to issue guidance on cryptocurrencies 'soon'

The Internal Revenue Service (IRS) has made it a priority to issue more comprehensive tax guidance for cryptocurrencies, according to a letter from IRS Commissioner Charles P. Rettig. Back in April, Rep. Tom Emmer along with 20 U.S. Congress members, wrote to the IRS requesting “guidance on the consequences and basic reporting requirements for taxpayers that use virtual currencies.” 

According to the response letter, the IRS concedes Notice 2014-21 no longer offers sufficient guidance. Cryptocurrencies have developed considerably since it was first issued, and the institution has received numerous questions regarding cryptocurrency status. The new guidance will address the issues raised in the April letter, specifically “(1) acceptable methods for calculating cost basis, (2) acceptable methods of cost basis assignment, (3) and tax treatment of forks.”