The United States Internal Revenue Service (IRS) has partnered with TaxBit to provide data analytics and tax calculation services to cryptocurrency taxpayers
The IRS and other tax authorities around the world find it difficult to correctly record profits of crypto traders. However, they are increasingly making efforts to ensure that crypto traders and investors pay taxes.
Yesterday, the tax authority announced that it has entered into a partnership with TaxBit, a Sub-contractor of DPI, Inc. In its press release, the IRS said TaxBit will provide data analysis and assistance in tax calculation for taxpayers with cryptocurrencies.
TaxBit co-founder and CEO Austin Woodward explained that this is a big development for the cryptocurrency space. “It shows that regulators are adopting the asset class, but in a way that ensures a straightforward approach to complying with existing regulations. We believe this is an important step in enabling cryptocurrencies to gain widespread adoption“, he added.
TaxBit is an experienced software company in its field. The company has helped clients file millions of tax forms over the years. The TaxBit Enterprise and TaxBit Consumer services are designed to eliminate the stressful aspect of cryptocurrency-related tax reporting and help users actively optimize investments and the use of digital currencies for tax purposes. “Tax compliance is not the only focus of the company. In collaboration with several leading cryptocurrency platforms, TaxBit is also developing the first Big Four and SEC compliant ERP solution for accounting, which will be released later this year along with plans for international expansion in 2021“added the press release.
IRS Tracks Crypto Tax Evaders
The IRS has been tracking crypto tax evaders in recent months. A U.S. federal court earlier this month authorized the IRS to obtain information from customers who traded cryptocurrencies on the Kraken exchange.
The tax agency is looking for data from taxpayers who conducted transactions with cryptocurrencies worth at least $ 20,000 from 2016 to 2020. The approval concerning the exchange Kraken came a few weeks after the IRS has already received similar information from Circle.
The Ministry of Justice claims that the crypto exchange did nothing wrong. The records are used to obtain information about taxpayers who use these platforms. The IRS wants to ensure that every taxpayer submits a statement and pays taxes at a reasonable rate.