Julie Foerster, the agency’s point person for cryptocurrency taxation, also stressed a need for working with the community at Consensus 2023.
The US Internal Revenue Service hopes to issue crypto tax guidance ready “in 12-ish months,” Julie Foerster said from the stage at Consensus 2023 on Friday.
The digital assets project director also said the IRS is planning to change how it looks at cryptocurrency and wants to work more with the industry.
Foerster, who stressed her views are her own and not necessarily those of the IRS, said her five-person team was with her at Consensus, presumably moving through the convention center, talking to people about taxes and what the US agency can do better.
“We are engaging with you all so we get it right and build a plan,” she said. She later added the IRS “needs to look at the skills of the people we have today and those we will bring on in the future. … We need to have the right tools and the right people.”
As it currently stands, the IRS considers cryptocurrencies to be convertible virtual assets that can be used as payment for goods and services, digitally traded between users and exchanged for other currencies.
While not considered to be fiat currency, for federal tax purposes cryptocurrencies are considered property, and as such users are required to report their digital assets activity on their tax returns.
Foerster highlighted that the landscape for digital assets is an evolving one, and emphasized a need to increase communications between the agency and the crypto community. In particular she urged people to comment on a March proposal to tax non-fungible tokens (NFTs) like other collectibles. The comment period closes June 9.
Foerster added the US tax agency is also talking to some of its foreign counterparts – she did not name them – about crypto taxation best practices.
“I will say that we have had countries come in and want to talk to us and in our large business and international division. Events like this and other events that we’ve attended also are providing us an insight or perspective internationally,” she said.
In the end, however, she said the agency has to find “other ways to get our message across to assist in voluntary compliance.”