Tax Time: Ernst & Young Release Crypto Tax App
A new crypto reporting app by the big four accounting firm EY will help clients with tax reporting as the IRS cracks down on tax evasion. Multinational professional services firm Ernst & Young have released a crypto tax app called EY CryptoPrep. It’s a fully automated, web-based Software as a Service (SaaS) product to assist clients with U.S. tax filings.
EY CryptoPrep takes data from numerous exchanges and major cryptocurrencies, automatically applies relevant tax rules and completes Form 8949. Clients can choose to use the program themselves or have it as part of a managed service.
EY America’s Vice Chair of Tax Services Marna Ricker explained that the application was a direct response to growing interest in cryptocurrencies:
“Our clients increasingly hold and trade crypto assets, creating the need for an innovative solution to address the evolving complexity around filing crypto taxes.”
Cryptocurrencies have caused confusion and difficulty for many users due to stringent recording requirements for traders in addition to somewhat opaque tax regulations in certain cases.
The IRS cracks down
The application arrives just in time as the IRS looks as if it’ll be cracking down on non-compliance in cryptocurrency tax. In May this year, they sent out a Statement of Work (SOW), soliciting private contractors to aid in auditing tax returns related to virtual assets.
The IRS has not further clarified its 2019 crypto tax guidelines except to see that U.S. citizens are required to disclose their cryptocurrency holdings including any gains or losses.
Global tax uncertainty
The U.S. is not the only country still developing their taxation laws around cryptocurrencies. Earlier this week, South Korea’s finance minister confirmed they will impose a cryptocurrency tax in the near future. He also said the government was conducting international discussions around a new digital tax structure.