On May 20, the Treasury Department announced it would require crypto transfers valued at $10,000 or more to be reported to the IRS. These new IRS regulations put businesses that deal in cryptocurrencies on notice about the increased scrutiny of digital assets.
I recently had the chance to discuss this new requirement and other questions about cryptocurrency and taxes in an interview for the Hartford Business Journal’s recent story on the increased scrutiny by the IRS on cryptocurrency transactions.
Here are some of my comments that were used in the article.
- “[Regulation] has mostly been geared toward individuals, and now they’re looking at businesses getting involved in the cryptocurrency space. It’s an emerging issue, and now the U.S. Treasury is concerned that tax dollars are going to be hidden or missed because transactions are occurring in digital assets instead of U.S. dollars.”
- “There’s a lot of misinformation or a lot of assumptions that could be made from just googling ‘What do I do about this?’ ”
- “Classifying transactions appropriately and converting to the right currency — that stuff requires judgement, that stuff requires an understanding of the accounting and tax rules.”
- “How much exchange rate risk do they want to take on the cryptocurrency? Are they in the business of operating their core business or are they in the business of speculating on Bitcoin?”
New Haven-based consultant Bryant Eisenbach, an FML client, said he already reports his transactions in detail and doesn’t see the purpose of the new rule. “I don’t see the $10,000 reporting requirement as helping anything,” Eisenbach says in the story. “You’re either following the rules already or you’re taking steps so you don’t have to follow them.”
