Are You Aware of New Reporting Rules for Digital Assets?

With a tiered approach to compliance, the Internal Revenue Service has broadened reporting requirements and compliance for digital assets to match their complexity as currency continues to permeate the financial sector. This means that regulations could be subject to change more frequently as different aspects of reporting requirements are identified and businesses adapt their internal systems and processes to meet these new requirements before unleashing more complex cost basis tracking and reporting.

Some examples of such changes may likely include the introduction of the “1099-DA” form, special rules for qualifying stablecoins and specified NFT’s, backup withholding requirements, multiple broker rule clarification, expanded definitions, new documentation requirements and cost basis tracking and reporting. Refer to the FAQ's on Virtual Currency Transactions and Reporting Crypto on the IRS website for more information on these items.

This signifies a significant change in taxation, and for businesses to remain ahead of these changes, they must have adequate planning, resources, and a strong compliance infrastructure. To reduce any blind spots and improve your business's ability to take advantage of opportunities in this new digital era, seek guidance from your local tax attorney regarding any federal, state, or foreign tax matters.

If you have any questions regarding your state and/or federal tax return(s) or received a notice from the IRS, FTB, EDD or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.