The IRS uses CoinMarketCap, and it’s asking the industry for other ideas. – Crypto News – Crypto News
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The IRS uses CoinMarketCap, and it's asking the industry for other ideas. The IRS uses CoinMarketCap, and it's asking the industry for other ideas.

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The IRS uses CoinMarketCap, and it’s asking the industry for other ideas. – Crypto News

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3 years ago

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The IRS is looking to up its game in terms of ensuring crypto tax compliance, and it wants the industry’s help.

The IRS’s Digital Asset Initiative Project Office (DAIPO) issued a Source Sought Notice last month asking “industry partners and other parties” to send in solution and product ideas to help the agency improve its pricing and market data capabilities. A Source Sought Notice is issued by a government agency when they are seeking potential sources for collaboration and information.

“We are primarily interested in solutions which can provide efficiencies to aid in compliance efforts to include, but not limited to, identifying digital asset transactions and transaction patterns, bulk data analysis, computing tax consequences of digital asset activity and assessing and analyzing digital asset transactions the IRS said in its requests,

Currently, the IRS uses “various public sources” for finding digital asset prices, including CoinMarketCap and Investing.com, the agency said. The IRS is looking for additional pricing data vendors who are able to provide pricing data by the hour, minute and second.

The IRS also wants help with how to process and analyze blockchain data and help with asset gain and loss computations. Blockworks requested comment but did not receive a reply.

The request for information is part of an agency-wide initiatives announced in April to ramp up its detection of compliance violations when it comes to complex assets such as crypto.

“For issues known to have high, ongoing risks of noncompliance or complexity, such as digital assets and listed transactions, we will prioritize resources to increase enforcement activities, including criminal investigation as appropriate,” the IRS wrote in the April report, which was mandated as part of the Inflation Reduction Act.

The source sought notice also comes as tax experts and investors continue to wait for new guidance from the IRS and the Treasury on changes in how digital assets may be taxed. The crypto industry is specifically looking out for the new Form 6045, which will include an updated definition of “broker,” potentially having a major impact on what firms and individuals are expected to report.

The IRS and Treasury have promised changes are coming, as Congress mandated more than 18 months ago, but have not provided any updates on the timeline or expected release date.

Industry members and potential vendors who respond to the IRS’ request for information may be invited to participate in a series of virtual meetings between July 19 and August 4, the agency said. The deadline to submit responses is July 12.

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