The United States Internal Revenue Service (IRS) has enlisted two new crypto tax specialists from the private sector to focus on digital assets. Amidst the official tax filing season in the U.S., which began on January 29, the IRS has consistently urged citizens to report all cryptocurrency and digital asset income, including nonfungible tokens (NFTs). Various forms of crypto income, such as rewards and staking, must be reported as part of tax obligations.
The newly appointed IRS executives, Sulolit Mukherjee and Seth Wilks, bring extensive experience in both tax and crypto industries. As executive advisers to the department, they will play key roles in developing IRS programs focused on digital assets, encompassing service, reporting, compliance, and enforcement efforts.
IRS Commissioner Danny Werfel emphasizes the importance of leveraging expertise from the private sector to build a robust digital assets infrastructure. The department plans to utilize funding from the Inflation Reduction Act (IRA) to enhance compliance in emerging areas, including digital assets.
Taxpayers in the U.S. are not mandated to report cryptocurrencies held in wallets, transfers between personal wallets, or purchases made using fiat currency. Additionally, the IRS announced on January 17 that cryptocurrency transactions exceeding $10,000 do not require reporting, intending to implement this rule following the release of a regulatory framework.
This decision reversed a new law enacted on January 1, which mandated all U.S. businesses to report cryptocurrency transactions over $10,000. The IRS clarified that digital assets are presently excluded from determining whether cash received in a single transaction meets the reporting threshold.
The U.S. House Financial Services Committee acknowledged several challenges with the recently implemented digital asset reporting requirements, emphasizing the need for clarity and improvement in regulatory frameworks.
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