August 19th, 2019 | Coin Tracking
The IRS is on the verge of issuing cryptocurrency guidance for the first time since 2014. If a recent warning letter is any indication of what the guidance update will entail, cryptocurrency users will most likely need to use a stricter accounting method for determining cost basis when the prepare their taxes.
Down-to-the-minute accuracy may be required
Back in 2014, the IRS said that cost basis only had to be accurate down to the day for many types of cryptocurrency transactions. This flexibility was a benefit because it provided some wiggle room. If the recent warning letters are any indication, that lenient policy may be about to change.
The IRS sent out warning letters last month
On Monday, Nikhilesh De of CoinDesk took a closer look at the language of a warning letter that the IRS sent out to 10,000 US-based cryptocurrency holders in search of clues to what its coming guidance update will entail.