The US IRS Releases New Guidances to Crypto Taxpayers!!!
We have four trending news pieces to share with you today. First up the US Internal Revenue Service (IRS) issues guidelines for tax reporting regarding cryptocurrency airdrops and hard forks. Second up, Mark Zuckerberg, the CEO of Facebook, will testify before the House of Representatives Financial Service Committee on October 23 regarding Facebook’s proposed Libra stablecoin project. Moving on, Lucas Geiger, the co-founder of blockchain infrastructure startup Wireline, recently announced Open Libra – a permissionless fork of Facebook’s planned stablecoin. And the last news for today, cryptocurrency exchange Binance announces WeChat and Alipay support for Bitcoin purchases.
The Market Today
The crypto sphere is currently witnessing a bullish trend with many major cryptos in green. Bitcoin is surging by 5.2%, recovering and moving back to the $8,600 mark. Similarly, Ethereum increased pretty well from yesterday, gaining 6.8%. XRP, EOS, and LTC are also rising as well.
US IRS published new guidance to crypto taxpayers
According to a report on Cointelegraph, the United States Internal Revenue Service (IRS) published a document addressing guidelines for tax reporting regarding cryptocurrency airdrops and hard forks. The Revenue Ruling 2019-24, announced on October 9, addresses common questions from taxpayers and practitioners. The guidance also answers many questions concerning cryptocurrency transmissions for investors who decide to hold cryptocurrencies as a capital asset. IRS Commissioner Chuck Rettig stated,
“The new guidance will help taxpayers and tax professionals better understand how longstanding tax principles apply in this rapidly changing environment. We want to help taxpayers understand the reporting requirements as well as take steps to ensure fair enforcement of the tax laws for those who don’t follow the rules.”
For those who are not aware, the new document adds to Notice 2014-21, which clarifies
“General principles of tax law to determine that virtual currency is property for federal tax purposes.”
Lokay Cohen, the vice president of the platform for cryptocurrency tax calculation Bittax, mentioned to Cointelegraph that the guidance distinguishes hard forks from airdrops and not every hard fork is treated as an airdrop. If you’ve received new currency in a hard fork, you need to report the assets to the IRS as gross income.
Facebook Libra will be under testimony on Oct. 23
Cointelegraph reported today that Facebook CEO Mark Zuckerberg is going to testify with the House of Representatives Financial Services Committee on Oct. 23 about Libra, the controversial stablecoin. The testimony, titled: “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors”, was announced by Congresswoman Maxine Waters on Oct 9. Apparently, all the way back in July Congress sent a letter to Facebook, ordering an immediate moratorium on the implementation of the Libra token and digital wallet Calibra. The statement also mentions the draft bill “Keep Big Tech Out of Finance Act,” designed to prohibit and ban large tech platforms from getting licensed as financial institutions in the United States.
“The draft legislation prohibits large platform utilities, like Facebook, from becoming chartered, licensed or registered as a U.S. financial institution (e.g. like taxpayer-backed banks, investment funds, and stock exchanges) or otherwise becoming affiliated with such financial institutions.”
Now, for those who are not aware, prior to this, Calibra CEO David Marcus did stand for testimony on Libra’s advantages with House Financial Services Committee and the Senate Banking Committee in July 2019. Later in September, he released a statement, pointing out the shortcomings of the existing payment systems such as SWIFT and RT1. But despite Marcus’ efforts, on Sept. 26, Zuckerberg declared Facebook is now taking a much more careful and cautious approach to Libra than its previous projects.
OpenLibra will be an open alternative to Facebook’s Libra
During the ethereum developer conference Devcon, Lucas Geiger, the co-founder of blockchain infrastructure startup Wireline, announced that they will be launching OpenLibra, a permissionless fork from Facebook’s Libra coin. Upon hearing the news, Ethereum developer Lane Rettig tweeted:
“Seeing #openlibra publicly announced for the first time is sending shivers down my spine. I am so excited about this initiative to ‘lock the door open’ for libra tech.”
If you’re wondering what OpenLibra is all about, according to the project’s official website, OpenLibra aims to become “an alternative to Facebook’s Libra that places emphasis on open governance and economic decentralization.”
“Despite pushback from nation-states, we believe that Facebook is likely to succeed in its goal. OECD Governments will be focused on their own outcomes, and in reality, have little legislative power to leverage against a transnational force such as Facebook’s Libra. For that reason, we are creating OpenLibra.”
Binance integrates with WeChat, Alipay payment
The global cryptocurrency exchange Binance has just added WeChat and AliPay as payment methods on its platform. Now, the update was first leaked by founder and CEO of the computing power-sharing platform, BitDeer, before Changpeng Zhao, CEO of Binance, responded with a confirmation via Twitter. Now here’s a bit more detail. Users in China can now purchase Bitcoin via WeChat and AliPay. The service is still in the testing phase and is only available for Android users, as of now. It looks like both WeChat and AliPay are keen to be moving into the Chinse crypto market. CZ also noted that in just 5 hours of the announcement a significant amount of P2P trading volume was recorded.
And there you have it guys! That’s a news wrap to end a Thursday afternoon.
What are your thoughts?
What do you think of the IRS’ tax reporting guidelines for Hard forks and airdrops?
How do you think Mark Zuckerberg will go in his testimony to the House Of Representatives Financial Services Committee?
What are your thoughts on Open Libra?
Do you think it was a good idea for Binance to support WeChat and Alipay?
Please leave a comment right below to let me know what you guys are thinking.
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Disclaimer: Cryptopig content is written by a team of blockchain passionate people. We are not registered as investment advisors. Don’t take the information in this post as investment advice and make sure you do your own research before investing. Cryptocurrencies are a very risky investment, never invest more money than you can afford to lose.