Donations in cryptocurrencies should be reported on Form 990

At the end of December, the IRS changed the conditions for reporting donations to charities. Under the new provisions, they must be reported on Form 990 of the US tax system.

In addition to the aforementioned amendment, in certain situations, non-profit organizations must provide receipts for cryptocurrency donations.

“If tax-exempt organizations receive donations based on virtual currency in excess of $ 5,000, they should generally sign Form 8283, which confirms receipt of the contributions. It should also provide written receipts of donations of $ 250 or more. “

added the US tax and tax agency.

Donations in cryptocurrencies, growing

At the beginning of October last year, UNICEF announced its intention to accept donations in Bitcoin and Ethereum cryptocurrencies. The international organization has partnered with the Ethereum Foundation to expand the adoption of cryptocurrencies as a donation system.

This is an efficient way of development for the crypto ecosystem. The elimination of middlemen and false beneficiaries in the charity act resonates well with the ideals for cryptocurrencies.

The IRS has proven that it is seriously considering the adoption of cryptocurrencies, in the context where its purpose is to ensure transparency of transactions.

IRS Chief Counsel Michael Desmond said in October 2019:

“The IRS is still working on additional guidance on cryptocurrencies to resolve compliance issues, including basis calculation, evaluation and reporting. The Agency will intensify its efforts to ensure that cryptocurrency users comply with fiscal obligations, ”

added Desmond.

The adoption of cryptocurrencies can be performed properly if all usage scenarios are properly explored. Even though donors were exempted from reporting crypto-based charitable operations, charities and tax-exempt institutions were brought under the IRS’s authority regarding tax returns.