Cryptocurrency change Bitstamp has chosen global tax software program maker Sovos for its 1099 crypto tax data reporting wants. As digital forex scrutiny grows on the IRS, the corporate will use the Sovos Tax Information Reporting solution to totally automate reporting and fee for conventional and trendy transaction-level tax reporting, in addition to ship real-time regulatory compliance, liberating groups from the work required to watch, interpret and ship regulatory content material.
The partnership comes simply forward of the kick-off to the 2020 tax submitting season in January. The IRS lately launched its draft kind for the season, moving virtual currency to web page one of many normal 1040 kind. Updates to the shape, along with a new round of letters to crypto holders who might not have correctly reported crypto transactions on their federal revenue tax returns, point out an elevated stage of scrutiny by the company.
“The Sovos resolution automates complicated reporting on the federal and state stage, which permits our staff to concentrate on different client-centric initiatives,” mentioned Hunter Merghart, Head of U.S. at Bitstamp.
Based in 2011, Bitstamp is the world’s longest-running cryptocurrency change and Europe’s largest by commerce quantity.
Defending Traders with Excessive-Quantity Crypto Tax Reporting
Bitstamp joins different crypto business pioneers — together with Paxos, Gemini and BlockFi — which have turned to Sovos for high-volume crypto tax reporting. As a trusted companion, Sovos is the most important non-public filer to the IRS of 10-Sequence tax varieties and might rapidly adapt to the compliance needs of the cryptocurrency market.
Regardless of its elevated scrutiny, the IRS has but to supply clear steering on 1099 form requirements for cryptocurrency reporting. Within the meantime, exchanges should interpret the laws to assist buyers perceive their crypto tax obligations and keep away from reporting incorrect revenue to the IRS and any relevant state departments of income. With such excessive volumes of exchanges in a market stuffed with regulatory unknowns, it’s important for firms like Bitstamp to make use of a seasoned companion like Sovos to beat blockchain tax reporting compliance challenges and pitfalls.
“As cryptocurrencies develop more and more standard, they’ve in flip fallen underneath heightened IRS scrutiny. Bitstamp understands that to stay compliant, they want a trusted companion like Sovos to automate what could be a actually arduous and complicated course of,” mentioned Paul Banker, common supervisor of Tax and Regulatory Reporting at Sovos.
To be taught extra about defending your digital asset firm from the burdens and dangers of cryptocurrency tax reporting, go to https://sovos.com/solutions/cryptocurrency-tax-software.
