Tax authorities around the world are increasing their focus on crypto transactions and companies are rushing to help investors navigate the unclear regulations. The latest example is Thomson Reuters which has added a new tool for American tax payers to report crypto dealings to the IRS.
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Thomson Reuters Gosystem Tax Now Supports Crypto
Toronto-headquartered multinational mass media and information firm, Thomson Reuters Corporation (NYSE: TRI), has revealed that its Individual Gosystem Tax system is launching a “Virtual Currency Organizer” for IRS 1040 form preparation. The tool will be a single point of data entry for crypto dealings including exchanges, forks, purchases and payments. Users of the income tax software suite will now be able to review all transactions in a central location and have the information properly reported on the relevant forms.
“Virtual currencies, or cryptocurrencies, continue to be a dizzying draw to investors. Many times, the investors are not considering, or fully aware of, the tax implications of their activity in this exciting new asset class. The IRS, however, has been keenly aware of the obligations in this area and has recently raised its scrutiny and compliance level,” the company explained. “Given both the IRS focus on and accelerating proliferation of digital assets, Thomson Reuters recognizes the additional challenge that this digital asset class introduces and is committed to providing industry-leading solutions in this new frontier of tax reporting.”
To deliver this new service, Thomson Reuters has entered into a collaboration with a firm that specializes in the accounting and reporting of cryptocurrencies, Verady. Its Ledgible platform allows investors, tax preparers and financial institutions to perform portfolio tracking and reporting of cryptocurrency activity. It has been specifically designed to simplify the lengthy and complex process of consolidating records from exchanges, wallets, blockchain explorers, and other cryptocurrency data sources.
Ledgible supports many digital assets including BTC, BCH, BTG, BSV, DASH, EOS, ETC, LTC, XMR, XLM, ZEC, ETH and ERC20 tokens. The supported exchanges are Bibox, Binance, Bitfinex, Bitstamp, Bittrex, Coinbase, Gemini, Hitbtc, Huobi, Kraken, Lbank, Okex, Poloniex and ZB. The platform also supports a wide array of hardware and custodial wallets including Trezor, Ledger and Bitgo.
IRS Focuses on Crypto Traders
The launch of new crypto tax services at this time is not surprising considering the focus by IRS on the field. As news.Bitcoin.com previously reported, 2019 will be the first year that the IRS will explicitly ask U.S. taxpayers to disclose all their cryptocurrency dealings. In fact, the new 1040 IRS filing form for the 2019 tax year now includes a “Question #0” at the very beginning of the form asking about any taxpayer activity with virtual currencies.
In July of this year the IRS sent out 10,000 letters to American tax payers that it suspected of having crypto transactions that they failed to report and pay the resulting tax from or did not report their transactions properly. “Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties,” IRS Commissioner Chuck Rettig said as the time. “The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”
The 2019 Schedule 1 of Form 1040.Last week Lukka announced its DIY tax preparation product for U.S. taxpayers invested in cryptocurrencies. It is designed to provide taxpayers with a secure, guided tax reporting experience that enables the accurate calculation of taxable gain/loss on crypto investments at an affordable price. The new offering evolved from Libra Tax, the commercial crypto tax calculator released in 2014, and is built to complete crypto data collection, enrichment, and calculation processes not supported by traditional tax preparation software solutions.
“Lukka is bringing institutional-grade tax preparation products to all consumers with scalable and secure tools that have guided experiences and are incredibly easy-to-use,” said Jake Benson, Founder and CEO of Lukka. “Considering the intense IRS focus on compliance and lack of accuracy in prior year reporting, we believe that the do-it-yourself taxpayer requires a purpose-built crypto tax product they can trust will comply with IRS requirements; Lukka Tax meets that need.”
What do you think about Thomson Reuters adding a crypto tax tool? Share your thoughts in the comments section below.
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Author: Avi Mizrahi