Chiming in a little late but happy to try to clarify a few issues here

1) El Salvador law may in fact enable US taxpayers to claim bitcoin is a foreign currency.

2) Some of the law cited about what foreign currency is is irrelevant. For tax law we have to stay within Title 26.

3) Section 988 would exempt $200 of personal use gain from taxation. BUT if you go that route then all bitcoin gains above that amount would be ordinary income and NOT capital gain. Big tax rate difference there. so be careful what you wish for.

Having recently talked with members of FATF and OECD on policy issues my understanding is that they will be looking to set up a baseline KYC procedure for bringing digital assets into the traditional regulatory/finance world. The most common framework i've see so far would use some sort of gatekeeping wallet where deposits will need to sit in a "deposit wallet" first where the receiver can then risk score the assets with KYT info (blockchain analytic firms) before accepting it into their wallet. Privacy coin deposits wont be banned but they would subject the depositor to non-blockchain based source of funds analysis.

AICPA just put this out... should help:

https://www.aicpa.org/content/dam/aicpa/interestareas/informationtechnology/downloadabledocuments/accounting-for-and-auditing-of-digital-assets.pdf

I don’t know, they are trying to bring back Arthur Andersen...

Pick a degree that would otherwise interest you and make blockchain your chosen industry.

Get a traditional finance or econ degree and go into fintech. Watch which banks get the new OCC charters and apply to work there.

Get a law degree or your CPA and focus on blockchain/digital asset issues. All the big 4 and most top law firms have groups that focus on blockchain. Top specialties would be securities, banking, tax, and contract litigation.

Most countries will actually tax you upon any trade. BTC to ETH would be considered a sale of BTC to fiat then a fiat purchase of ETH. It gets complicated when you start talking about BTC to LN, especially when it's not your own channel.

Yes. Cryptotrader.tax released that because they did not have the capabilities to perform the requested calculations. There is only one software provider out that that can meet those specifications. My accounting firm received the same RFP from the IRS but we declined due to potential conflicts of interest, and the fact that we are not a software company so it would be too labor intensive. It was foolish to release that letter as they burnt that connection with the IRS. I regularly speak with the IRS officials that sent that out and as a professional courtesy do not discuss those private conversations, which i find very valuable.

The sample language in the RFP is just an example. The IRS intends to look at all open tax years.


I think it is more likely that this is a field agent of the IRS that stumbled upon a crypto audit. This does not look like a standardized initial document request approved by the national office.


I'm a tax attorney at one of the top, non-Big 4, accounting firms and lead the digital asset tax practice. We represent the whole spectrum of the industry from investors, traders, miners, tokens, exchanges, etc.

Correct. The OCC cannot make law but only interprets the laws Congress writes or issues regulations when Congress grants them specific authority to do so. In a way, the OCC coming out and saying it this way is better right now since it implies that any banks that have been doing this were not breaking the law.


Correct


Banks will move slow but I'm already seeing some start to inquire about testing possible custody offerings. You'll see the fintech companies move in first, perhaps getting the new payments charter. There will be lots of push back here. Entrenched national banks, state chartered banks, and state regulators (who are dependent on fees) will view this as a threat. Thankfully the OCC does not appear to care and would rather open up competition. I'd expect to see the OCC move in further by perhaps allowing trading or encouraging the development of bank issued stablecoins.

I saw that circulated when it was posted but I have not personally seen any clients hit with an IRS crypto audit.  The IRS recently put out an RFP for assistance in calculating basis so I think they are a ways away from mass audits of individual taxpayers.  The audits I have seen in this space were entities.  Based on discussions with IRS and Treasury officials this list would seem overly detailed for their capabilities and current enforcement targets.

The OCC has been signaling that they would be stepping into crypto regulation for some time.  With Coinbase's former top lawyer now at the helm of the OCC they are making moves.  In a guidance letter released 22 July they gave permission for US chartered banks to custody crypto.  Link below.  I have a feeling there is more to come from the OCC.
 Is this just more noise or could the OCC really move the needle of adoption?

https://www.occ.gov/news-issuances/news-releases/2020/nr-occ-2020-98.html