Cryptocurrency Fintech News

Blox & Sovos Discover Deep Challenges for Cryptocurrency Tax Reporting and Compliance

Blox & Sovos Discover Deep Challenges for Cryptocurrency Tax Reporting and Compliance

More than half of CPAs believe their clients do not receive accurate 1099 forms with the data needed for preparing tax returns

Blox, an industry leading crypto accounting platform, and global tax software leader Sovos have released the “2020 Crypto Tax Report,” which identifies emerging challenges for today’s cryptocurrency tax and accounting professionals. The report finds major gaps in reporting data and a lack of client understanding around crypto tax law, with more than 50% of CPAs surveyed believing most of their crypto clients likely owe back taxes.

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The Blox and Sovos Crypto Tax Report surveyed U.S.-based CPAs who provide cryptocurrency accounting and taxation services to businesses and individuals that interact with digital assets. The report comes during the first tax year in which the IRS added language about digital assets to the standard 1040 filing form, which asks taxpayers whether they held “any financial interest in any virtual currency” in 2019.

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“It’s clear from this report that crypto investors are still alarmingly unaware of how to handle their reporting and tax liabilities,” said Paul Banker, general manager of Tax and Regulatory Reporting at Sovos. “While tax regulations continue to take shape, crypto exchanges should be providing 1099s to their clients now to help them understand taxable crypto events and avoid improper or under reporting of their income to the IRS and applicable states.”

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