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  • Heng Kim
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  • Last Posted: 2017-05-27 02:00:07
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IRS Agrees to Key Digital Currency Overhaul Plan

2017-01-18 12:08:29

The further rise of the cryptocurrency is inevitable.

Recently, the US Internal Revenue Service agreed to a major overhaul plan encompassing digital currencies such as bitcoin after the audit by the Treasury Inspector General for Tax Administration. An accompanying 31-page report stated none of the federal tax agency’s operating units have established any guidelines or regulations for examining or probing virtual currencies’ noncompliance to tax rules.

It added bitcoin automated teller machines in malls, services, and shopping malls. Also, college campuses are giving people an easy access to the cryptocurrency, which basically enable taxpayers to pay for the products and services they avail like conventional currencies.

The TIGTA emphasized the IRS has insufficient action even after introducing its Virtual Currency Issue Team and releasing Virtual Currency Guidance for consumers to comply with. The US government office said digital currencies should be considered property, not currency, for taxation purposes.

Since bitcoin-related dealings are semi-anonymous, it is possible for anyone to utilize the cryptocurrency to avoid taxes or engage in money laundering activities. Provided there are rules, many people still opt not to follow those. Conversely, certain companies have increased its adherence to such regulations to legitimize the use of bitcoin in day-to-day transactions.

Therefore, the federal office recommends that the IRS work with all its offices to observe a new technique regulating bitcoin and the like, noting it should be implemented by the end of September next year.

Formed in 1998, the TIGTA was incepted under the IRS Restructuring and Reform Act to monitor corruption within the American government agency. It is committed to detecting and averting any fraudulent acts and abuses within its jurisdiction by conducting audits, inquiries, inspections, and reviews to ensure the federal agency’s accountability to its annual tax collection.