The Bitcoin Foundation has acknowledged and responded to the decision set forth by the IRS bitcoin ruling. With bitcoin being looked at by the Internal Revenue Service, bitcoin gains more legitimacy in the eyes of the government and the public. However, though the foundation claims that the IRS’ involvement is a good thing, they also feel that their demands are unrealistic.
The IRS deemed bitcoin to be treated as property, rather than a currency.
BTC Foundation on IRS Bitcoin Ruling
The Bitcoin Foundation’s release reads:
“The Bitcoin Foundation appreciates the IRS’ hard work in providing much-needed clarity to those transacting in digital currencies. The digital currency industry has, on the whole, welcomed greater regulatory clarity for its ability to foster innovation in this critical and emerging space.”
However, in the realm of taxation, the foundation claims that the IRS’s view of bitcoin being a property imposes difficult recording and reporting on requirements of its users operations.
The Bitcoin Foundation is seeking further clarity from the IRS about the bitcoin tax regulations. The statement continues in concern over bitcoin’s future:
“IRS did not, in particular, seek meaningful input from the digital currency industry or the public at large. As a result, the guidance creates a poor framework for innovation.”
The foundation looks forward to further stating their case in the coming weeks.
Burden on Bitcoin
Bitcoin expert Tyson Cross believes that the new tax regulations on bitcoin will burden the digital currency more than enhance it. The Bitcoin Foundation member stated in an email of ways of improving the IRS’ plans for bitcoin.
“Users will have to track their transactions and determine the amount of their taxable gain each time. It’s quite a burden. The rules on taxing foreign currency provide an exception for ‘personal transactions’ for that very reason. It would be great to have that exception (or something similar) apply to bitcoins as well.”
Though bitcoin will be taken through more rigorous tests, regulation is necessary for its growth. There may be no getting around having to pay taxes for bitcoin transactions, but at least they should be clarified in to the public.