Crypto-asset platforms and exchanges move to solve tax challenges ahead of IRS regulation
BOSTON (PRWEB) MAY 08, 2019
Global tax software leader Sovos today announced that Paxos, America’s first regulated crypto-asset platform, has chosen Sovos for its tax information reporting needs. Sovos’ Tax Information Reporting Solution will automate Paxos’ 1099-B forms and filings, eliminating errors and delivering automatic regulatory updates in this constantly changing arena. While crypto platforms wait for more clarity from the IRS around reporting guidelines, platforms like Paxos are proactively investing in solutions that will enable them to stay compliant in advance of forthcoming regulatory waves.
“The high volume and complexity of 1099 crypto reporting require sophistication. That’s why we turned to Sovos,” said Andrew Chang, chief operating officer, Paxos. “Now, we can more easily ensure that we and our clients are compliant and prepared for the inevitable changes to come.”
IRS regulations taking shape
To date, the IRS has issued Notice 2014-21, which indicates Form 1099 reporting is required for certain virtual currency transactions. However, the guidance leaves a lot of questions unanswered. In November, IRS Commissioner Charles Rettig indicated the industry should, “pay attention to informal guidance as though it’s formal guidance.” He also promised, “the IRS will have more information about [crypto] than you could ever imagine.”
However, murky cryptocurrency regulations haven’t stopped the IRS from starting to enforce 1099 reporting regulations for crypto. In addition, the Securities and Exchange Commission has offered recommendations to investors to only trade on platforms that have registered as national security exchanges, a move that has added further pressure to report transactions to the IRS.
“The alternative currency market is focused on growing up in order to avoid the staggering volatility the market saw last fall,” said Paul Banker, general manager of tax information reporting at Sovos. “This era of maturity will undoubtedly be spurred by additional IRS regulations; therefore, intelligent tax information reporting is now critical to trading platforms’ future success.”
To read more about the latest in cryptocurrency tax reporting, visit sovos.com.
Sovos is a leading global provider of software that safeguards businesses from the burden and risk of modern tax. As governments and businesses go digital, businesses face increased risks, costs and complexity. The Sovos Intelligent Compliance Cloud combines world-class regulatory analysis with its secure, scalable and reliable S1 cloud software platform to create a global solution for tax determination, e-invoicing compliance and tax reporting. Sovos supports 4,500 customers, including half of the Fortune 500, and integrates with a wide variety of business applications. Headquartered in Boston, Sovos has offices throughout North America, Latin America and Europe. Sovos is owned by London-based Hg. For more information visit https://www.sovos.com and follow us on LinkedIn and Twitter.
Paxos is a regulated financial institution on a mission to create a global, frictionless economy. By building infrastructure to enable the movement between physical and digital assets, Paxos is creating a future where all assets—from money to commodities to securities—are digitized and can move instantaneously, 24/7.
Today, as the first regulated Trust company for digital assets, Paxos technology makes it possible to trade, escrow and custody assets with confidence. Our institutional-grade stablecoin, Paxos Standard (PAX), is the world’s most popular alternative stablecoin, and our digital asset exchange, itBit, is one of the leading Bitcoin trading platforms.
With offices in New York, London and Singapore, Paxos takes a global view of modernizing the financial system. Learn more at http://www.paxos.com.