Congressman Steve Stockman (R-TX) introduced legislation suggesting a new way to tax Bitcoins and other virtual currency. The new legislation is suggested to reform the method currently being implemented by the Internal Revenue Service (IRS).
Currently, according to a statement from Congressman Stockman’s office, the IRS is beginning to regulate virtual currencies as property and thus requires capital gains tax payments on any virtual currency transaction. Stockman’s proposal would, rather, require the payment of sales taxes on all virtual currency transactions.
Stockman stated this is a “more proper way of taxing such transactions.”
Forbes Magazine reported the Bitcoin Foundation as saying the IRS’ method of taxation could lead to unrealistic reporting. Stockman told Forbes he was introducing this bill “to build awareness and create a consensus in the Bitcoin community around government regulation of virtual currencies… I don’t think anyone really has a flavor of what they want and I want to start the Bitcoin conversations.”
Forbes said that Stockman, who just failed in an attempt to unseat Senator Sen. John Cornyn (R-TX) in the 2014 Texas Republican Primary, is the first Member of Congress to accept Bitcoin contributions in a political campaign. The Federal Election Commission has yet to formally approve using virtual currencies for campaign contributions.
NewsBTC, an online Bitcoin news website, reported the current IRS regulations as being not good for the industry.
“For users, this [the IRS regulation] has become rather problematic primarily because by the rules, users would have to keep track of all of their transactions and calculate gains/losses at the end of the year.”
“We salute Congressman Stockman for making good on his promise to support digital currencies like Bitcoin,” said Nick Spanos, NYC Bitcoin Center founder.
“The Congressman displayed an interest in Bitcoin’s path-breaking, job-creating technology early on. On behalf of the entire digital currency community who have a stake in this nascent industry’s growth and its normalization into the economy, Bitcoin Center NYC thanks Congressman Stockman for leading the charge amid what often seems like conspicuous silence on the matter,” he continued.
According to Stockman’s release, he recently attended the New York City Bitcoin Center to discuss the legislation further.
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