The largest cryptocurrency exchanges have asked the IRS to clarify the regulation

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 the tax authorities to excessive rigor to their business, which does not correspond to its size and secrecy. Coinbase was represented by the head of tax reporting Sulolit Mukherjee, Kraken was represented by the head of taxes Lisa Askenazi Felix.

“Even the largest companies in our space are actually not so huge,” Askenazi Felix said. “As our industry is just starting to develop, we are trying to correctly respond to various changes in domestic and foreign jurisdictions in which we can conduct our business.”

Mukherjee supported her, emphasizing that crypto companies are strongly interested in cooperation.

“Coinbase or Ripple makes no sense to do something wrong,” he said, adding that industry participants are under pressure from regulators. “Tax officials are not always the friendliest people in business negotiations.”

Jamison Sites, the head of cryptocurrencies of RSM, shares this opinion:

“All the major players in this space - Coinbase, Kraken - are, by and large, startup companies. Clients contact us, and not only, and they all talk about infringement at the most basic level. ”

Sites tried to clarify the situation with a hypothetical example:

“Imagine email in the 80s when all these startups were opening, imagine if the US Postal Service came in and said,“ Hey, it's illegal to send like that. ”

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 those in this room will agree that there is no clarity today,” Askenazi Felix said.

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. Mukherjee praised the IRS’s readiness to listen:

“I think the IRS’s willingness to participate in discussions with us is a very healthy sign.”

Alexey Shternshis
Pi Capital Union