The United States Internal Revenue Service (IRS) has enlisted the expertise of two new crypto tax specialists from the private sector to focus on digital assets.
The official tax filing season in the U.S. began on Jan. 29, and since then, the IRS has consistently issued notices urging citizens to disclose all income from cryptocurrency and digital assets, including nonfungible tokens (NFTs). The reporting of crypto received in the form of rewards or through staking, among other areas, is mandatory.
The IRS has hired Sulolit Mukherjee and Seth Wilks as executive advisers to the department, according to an official statement. IRS Commissioner Danny Werfel believes that the private sector’s expertise can contribute to the successful development of a digital assets infrastructure that benefits everyone.
To establish compliance in emerging areas, including digital assets, the IRS will utilize the funding provided by the Inflation Reduction Act (IRA), a federal law designed to combat inflation.
It is important to note that taxpayers in the U.S. are not obligated to report cryptocurrencies that are held in wallets, transferred between two wallets owned by the same individual, or purchased using fiat currency.
Prior to the start of the tax season, on Jan. 17, the IRS reversed a law that required U.S. businesses to report all cryptocurrency transactions exceeding $10,000. The department intends to implement this rule after releasing a regulatory framework.
The short-lived law, which came into effect on Jan. 1, mandated that all U.S. businesses, including brokers, immediately report cryptocurrency transactions surpassing $10,000. The IRS acknowledged that there were inherent issues with the “poorly constructed digital asset reporting requirements” that were enacted on Jan. 1, as highlighted by the U.S. House Financial Services Committee.
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