The IRS Just Issued Its First Cryptocurrency Tax Guidance in 5 Years

The U.S. Internal Revenue Service (IRS) has published its first guidance in five years for calculating taxes owed on cryptocurrency holdings.

Industry members have been eagerly awaiting the update since May 2019, when IRS Commissioner Charles Rettig said the agency was working on providing fresh guidance. The agency’s 2014 guidance left many questions unanswered, and the crypto market has grown more complex in the years since.

As expected, the guidance notice released Wednesday addresses: the tax liabilities created by cryptocurrency forks; the acceptable methods for valuing cryptocurrency received as income; and how to calculate taxable gains when selling cryptocurrencies.

Drew Hinkes, a lawyer with Carlton Fields and the general counsel to Athena Blockchain, told CoinDesk that “from the tax collector’s standpoint, this is the right answer,” though Certified Public Accountant Kirk Phillips said he was surprised that the guidance basically only addressed…