- The Internal Revenue Service (IRS) is reportedly seeking third-party contractors to help with taxpayers’ crypto calculations.
- Crypto tax software firm, CryptoTrader.Tax, has received a letter from the IRS requesting its financial services.
- CryptoTrader.Tax has clarified that it will not pursue the contract.
The US Internal Revenue Service (IRS) is reportedly looking for third-party contractors to assist with tax calculations of crypto users. CryptoTrader.Tax, a crypto tax software firm, shared the details of a letter, which it claims to have received from the IRS along with a Statement of Work.
An excerpt from the letter reads:
The Internal Revenue Service is engaging outside contractors to assist our Revenue Agents in calculating taxpayers’ gains or losses as a result of their transactions involving virtual currency. We are placing a few single-case contracts as pilots with a goal of publishing a solicitation and request for proposal for a larger multi-case contract.
The Statement of Work provides detailed information regarding the type of services requested by the IRS. CryptoTrader.Tax has clarified that it will not pursue the contract. The firm said that it remains focused on serving its customers and helping them in their tax reporting process directly.
The IRS is looking for assistance in the examination of taxpayers using crypto. In particular, the watchdog is seeking third-party service providers to help in aggregating and estimating the profits and losses incurred by taxpayers’ crypto transactions.
The IRS said:
Specialized technology and infrastructure is required to digest, contain, and analyze virtual currency data due to unique requirements such as but not limited to decimal place precision, varying field formats, and file formats.
In addition to data management and analysis, the IRS is looking for assistance with report preparation, data discrepancy analysis, error resolution and report revisions. The outside contractor will also be expected to be present at taxpayer meetings and to help the IRS with trial preparations.
According to the IRS, the data it requires for analysis and calculation includes, but is not limited to:
Publicly available on-chain data and private off-chain data; API keys obtained through exchanges, wallets; CSV, Excel or PDF files from various sources; paper documentation submitted by taxpayers; data obtained through merchant electronic systems; related data obtained by the contractor for valuation purposes.
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