Washington, D.C. (March 7, 2024) The American Institute of CPAs (AICPA) submitted a letter to the U.S. Treasury and Internal Revenue Service (IRS) providing recommendations for regulations that deal with gross proceeds and basis reporting by brokers, as well as determination of amount realized and basis for digital asset transactions. The AICPA recommends that Treasury and the IRS clarify the meaning of important terms and certain examples within the section 6045 proposed regulations.
AICPA’s recommendations include the following:
Clarify terminology, such as using either “retailer” or “merchant” consistently throughout the regulations.
Define important terms such as “digital representation of value,” “cryptographically secured distributed ledger,” and “any similar technology” – all of which are used to define what a “digital asset” is.
Clarify definitions and certain examples of when someone is considered a “broker” of digital assets.
Modify and clarify the definition of digital asset payment processor.
Clarify certain examples to reflect the rules intended to be illustrated and provide helpful guidance to interpret these complex rules.
Clarify an example to address additional facts that can exist in the transfer of a digital assets such as the transferor receiving “change” (generally referred to as UTXO).
“IRS guidance and regulations have not yet caught up with the wide range of digital asset issues we are seeing today,” says Peter Mills, Senior Manager, AICPA Tax Policy & Advocacy. “It is important for the government to provide clear guidance so that taxpayers and tax professionals can understand and comply with their reporting obligations. AICPA’s recommendations will help ensure that final regulations, when issued, will be clear and helpful.”
About the American Institute of CPAs
The American Institute of CPAs®(AICPA®) is the world’s largest member association representing the CPA profession, with more than 415,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. AICPA sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives continuing education to advance the vitality, relevance and quality of the profession.
BACKGROUND:
October 28, 2022 - AICPA Comments on Virtual Currency Reporting under Internal Revenue Code Section 6045 and Section 6050I, Form 8300 and Instructions