IRS urged by GAO to offer more cryptocurrency tax guidance

The Internal Revenue Service could be doing more to help taxpayers who own Bitcoin and other forms of cryptocurrency to comply with their tax obligations, according to a new report from the Government Accountability Office.

The report, issued Wednesday by the GAO, acknowledged that the IRS has provided some guidance in 2014 and 2019 on what it refers to as “virtual currency.” In 2014, it issued Notice 2014-21, which said the IRS would treat Bitcoin and other virtual currencies as property for federal income tax purposes and offered some examples of how long-standing tax principles could be applied to transactions involving virtual currency. Despite dramatic increases, decreases and volatility in the prices of various forms of digital currency such as Bitcoin, it took another five years before the IRS responded to the demand for further guidance in the form of frequently answered questions on virtual currency transactions.

However, part of the 2019 FAQ guidance isn’t considered…