US IRS Adds Cryptocurrencies to Taxpayer Reporting Form

The United States Internal Revenue Service (IRS) has updated the basic form that individual taxpayers in the United States use to report their income. Now it includes a point about cryptocurrencies.

Following the publication of an IRS cryptocurrency revenue reporting guide earlier this week, the US Internal Revenue Service has circulated a draft new Form 1040, Appendix 1, “Additional Revenue and Revenue Adjustments.” A draft form was sent by e-mail to companies involved in the development of tax preparation programs, as well as to the media.

The form has a warning that this is just a draft and not the final document for filing income statements. The IRS then asks the taxpayer the following question:

“At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?”

The main parts of the form, “Extra Income” and “Income Adjustment”, are displayed under this question.

“Taxpayers who submit in Annex 1 a report on income or income adjustments that cannot be entered directly into Form 1040 must tick the corresponding box to answer the question about virtual currency. Taxpayers do not need to submit Appendix 1 if their answer to this question is NO and they do not need to submit Appendix 1 for any other purpose, ”the IRS said.

The IRS asked companies developing software for taxpayers to post comments on the new form within the next 30 days.

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The manual released this week was the first document published in the United States in five years regarding the calculation of taxes from cryptocurrency transactions, as well as when receiving new coins as a result of forks and distributions by developers.