Some respite from the IRS following its controversial guidance on digital currencies: for this tax season, at least, holdings need not be declared on US FBAR forms.
FBAR, also known as FinCEN Form 114 (Report of Foreign Bank and Financial Accounts), are mandatory correspondence for those who hold more than US$10,000 in foreign bank accounts, which must be declared for tax purposes. While the IRS has recently moved to attempt an initial form of control over cryptocurrency earnings, it would seem that it is holding off on a full onslaught.
“Wave of the future”
The news was broken to in a webinar on Wednesday this week by IRS senior program analyst Ron Lundquist, report Bloomberg and newsbtc.com. “At this time, FinCEN has said Bitcoin is not reportable on the FBAR, at least for this filing season,” he confirmed.
“At this time, FinCEN has said Bitcoin is not reportable on the FBAR, at least for this filing season.”
He added, however, that this special treatment may alter in future, as Bitcoin’s rapid growth is being closely monitored and legislation will most likely require changing to reflect this.
More than this, IRS director of operations at the IRS Criminal Investigation department Rebecca Sparkman acknowledged Bitcoin’s unequivocal stake in the future, calling it “the wave of the future that’s here today.” Speaking at the May meeting of the American Bar Association Section of Taxation, she added, “Together we're going to have to look at how to deal with this new world.”
Don’t let that sound starry-eyed, however, Bloomberg reports, for this is the rhetoric of digital currency being placed “under the microscope.”