Cryptocurrency payment services firm BitPay has partnered with tax-related financial products company Refundo to enable people to get a portion of their tax refund back in bitcoin (BTC). The development was announced in a press release shared with Cointelegraph on April 30.
Refundo’s new product dubbed CoinRT allows taxpayers to receive all or a portion of the federal and state tax refunds in BTC through BitPay’s Payouts, purportedly ensuring low transaction fees, speed, and serving the underbanked.
To start using the platform, taxpayers need to create an account, provide a bitcoin wallet address, and receive a unique routing and account number to input on their tax return. Customers then have to pass a Know Your Customer procedure, and once the Internal Revenue Service (IRS) or state deposit the refund, BitPay processes the payment and transfers it to the taxpayer’s crypto wallet.
Leading financial industry players have been steadily embracing the tax issue when dealing with cryptocurrencies. Last month, Big Four auditing and professional services firm Ernst & Younglaunched a tool for accounting and preparing taxes on cryptocurrency holdings. The product can reportedly get information about crypto transactions from “virtually all” major exchanges, consolidate data from various sources, and automatically produce reports, including cryptocurrency-related IRS tax returns.
In February, United States tax preparation software TurboTax Online partnered with CoinsTax, LLC to add cryptocurrency tax calculation to its services. The service will allow users to import trading data directly from major exchanges. Once calculated, capital gains and income reports can be downloaded or uploaded directly into Form 1040 Schedule D.
On April 11, 21 different U.S. federal representatives sent a bipartisan letter to the IRS requesting guidance on how to report virtual currency taxes. The action took place before the filing deadline for federal income tax returns on April 15, 2019. Specifically, the letter asked the IRS to specify acceptable methods for calculating the virtual currencies’ cost basis, cost basis assignment and lot relief, as well as tax treatment of crypto hard forks, citing bitcoin’s fork bitcoin cash (BCH) that took place in August 2017.