IRS reveals new cryptocurrency tax guidelines: Are they beneficial?

The new policy in the crypto space has been generally well-received after attracting a large number of comments during a consultation. Trading platforms will now be required to report their customers’ gains and losses over the next three years, which is expected to facilitate more accurate tax returns and generate significant tax income for the IRS. However, individuals who have failed to declare their gains from crypto trades may face consequences, as the IRS seeks to close the tax gap related to digital assets.

While it is acknowledged that more work is needed in this area, it is noted that most taxpayers already use centralized brokers. There is concern regarding the potential for a significant loss of tax revenue due to delays in implementing regulations. A group has also raised issues about the impact on non-custodial entities, highlighting the need for further clarity and anticipating potential challenges ahead.

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