The largest cryptocurrency exchanges in the United States have turned to the Internal Revenue Service (IRS) with a request to provide clear guidance on how to regulate their activities, media reported.
On March 3, representatives of Coinbase, Kraken, and the accounting firm RSM US LLP visited the IRS office in Washington to draw the attention of tax officials to excessive rigor to their business, which does not correspond to its size and secrecy. Coinbase was represented by the chapter on tax reporting Sulolit Mukherjee, Kraken - by the head of global tax Lisa Askenazi Felix.
Even the biggest companies within our space are really not the huge, publicly reported companies right now. Because it’s such an emerging industry, we are still very much trying to react to all these different developments in all these domestic jurisdictions we might be doing business in and all these foreign jurisdictions we might be doing business in.
Lisa Askenazi Felix
Mukherjee supported her, emphasizing that crypto companies are strongly interested in cooperation.
There is no benefit to a Coinbase or a Ripple to not doing the right thing. Tax people are not always the most welcoming people in business conversations.
Head of Global Tax Information Reporting at Coinbase
The cryptocurrency chapter of RSM, Jamison Sites, shares this view:
All the big players in this industry — Coinbase, Kraken — they’re very much startup companies. We’ve seen a number of our clients, we’ve seen a number of non-clients who talk to us — it’s hitting their bottom lines.
Sites tried to clarify the situation with a hypothetical example:
Imagine if email in the 80s, when all these startups were coming in, imagine that the US Postal Service came in and said ‘hey, this is unlawful delivery.’
Representatives of exchanges explained that they would like to have more clarity as to what exactly should be done so as not to violate current legislation.
I think most of us in the room would agree that there is no clarity today.
Lisa Askenazi Felix
John Cardone, Assistant IRS Legal Compliance Commissioner, acknowledged the existence of “ambiguity” in the reporting context, including documents to be provided to users.
Today's meeting was one of the events within the framework of a wider dialogue between the IRS and representatives of the crypto industry, which was originally announced in mid-February.