The United States Internal Revenue Service (IRS) has bolstered its expertise in cryptocurrency taxation by appointing two new crypto tax experts from the private sector. Sulolit Mukherjee and Seth Wilks, both with extensive experience in tax and the crypto industry, have been hired as executive advisers to the IRS. Their role will focus on leading efforts to develop service, reporting, compliance, and enforcement programs specifically tailored for digital assets. The move reflects the IRS’s commitment to enhancing its capabilities in managing the taxation of digital assets effectively.
IRS Commissioner Danny Werfel emphasized the importance of leveraging private sector expertise to establish a digital assets infrastructure that benefits all stakeholders. The IRS intends to utilize funding from the Inflation Reduction Act (IRA) to strengthen compliance in emerging areas, including digital assets. While taxpayers in the U.S. are not required to report cryptocurrencies held in wallets or transferred between personal wallets, income derived from activities such as rewards or staking must be reported. The IRS’s efforts come amid increasing scrutiny and regulatory developments in the crypto taxation landscape.
The IRS’s initiative follows recent regulatory adjustments, including the withdrawal of a law mandating U.S. businesses to report cryptocurrency transactions over $10,000. This decision, made shortly before the tax season, was in response to concerns about the law’s implications and the need for a regulatory framework. The U.S. House Financial Services Committee also highlighted issues with the initial digital asset reporting requirements, emphasizing the importance of refining regulations to ensure effective compliance. As the IRS continues to navigate the evolving landscape of crypto taxation, collaboration with industry experts and regulatory clarity will be crucial in establishing fair and transparent tax practices for digital assets.
