The Usa Internal Revenue Service (IRS) is reportedly soliciting third-party contractors to assist with calculations of cryptocurrency users' transactions.

Crypto taxation software firm CryptoTrader.Tax publicly shared details of a letter information technology claims to have received from the IRS on May 12, together with an accompanying Argument of Work.

The latter has been uploaded to CryptoTrader'south blog, forth with excerpts from the letter, which reportedly stated:

"The Internal Revenue Service is engaging exterior contractors to assist our Revenue Agents in computing taxpayers' gains or losses as a result of their transactions involving virtual currency. Nosotros 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 Argument of Work provides detailed data as to the type of services sought by the IRS.

CryptoTrader.Tax says it does non intend to pursue the contract, emphasizing its focus remains serving its customers and profitable them in their tax reporting obligations directly.

What does the IRS need assist with?

In guild to support its exam of taxpayers using cryptocurrencies, the IRS is seeking a third-party to provide services that tin help to amass, value and compute the gains and losses incurred past individuals' cryptocurrency transactions.

This process may, in some cases, exist relatively elementary, the IRS notes, merely in others transactions may be dispersed across multiple exchanges and digital wallets.

The IRS provides farther insight into some of the challenges involved in handling crypto transaction data, noting that:

"Specialized technology and infrastructure is required to digest, contain, and clarify virtual currency data due to unique requirements such every bit but not limited to decimal place precision, varying field formats, and file formats."

Across data management and analysis, the IRS seeks assistance with report preparation, data discrepancy analysis, fault resolution and report revisions.

The contractor would also be expected to exist present at taxpayer meetings and to assist the IRS with trial preparations. They would potentially be asked to prove at trials equally a summary witness in order to explicate the calculations derived from the underlying information.

Notably, the IRS reveals the telescopic of the information it expects to be marshalled for analysis and calculation, which could include simply is non limited to:

"Publicly available on-chain data and individual off-chain data; API keys obtained through exchanges, wallets; CSV, Excel or PDF files from various sources; newspaper documentation submitted by taxpayers; data obtained through merchant electronic systems; related data obtained by the contractor for valuation purposes."

Farther resource

As reported, the IRS has released 2 recent pieces of detailed guidance for taxpayers who engage in transactions involving digital currency. These provide insights into hard forks and airdrops, recommended calculation methods and necessary documentation.