In a letter to the Internal Revenue Service, the American Institute of Certified Public Accountants (AICPA) has requested additional guidance about how existing tax principles apply to virtual currency transactions, such as those in Bitcoin, Accounting Today reported.

In particular, AICPA Tax Executive Committee chair Troy K. Lewis requested further guidance on:

• Acceptable valuation and documentation
   
• Expenses of obtaining virtual currency
   
• Challenges with specific identification for computing gains and losses
   
• General guidance regarding property transaction rules
   
• Nature of virtual currency held by a merchant
   
• Charitable contributions
   
• Virtual currency as a “commodity”
   
• Need for a De Minimis election
   
• Retirement accounts
   
• Foreign reporting requirements for virtual currency

Lewis noted that virtual currencies operate in decentralized environments where no entity or person is in charge of controlling or monitoring the asset.

“Therefore, the currency appears to have no location, which is a characteristic that would complicate foreign reporting compliance. Virtual currency transactions, in which taxpayers increasingly engage, add a new layer of complexity to the analysis of a client’s reporting requirements,” Lewis wrote. “The issuance of clear guidance in this area will not only reduce the confusion and burden for tax preparers but also allow taxpayers to accurately comply with IRS rules.”

Lewis also appreciated the expeditious work done by IRS to release guidance in the form of answers to frequently asked questions in Notice 2014-21 about the tax treatment of virtual currency transactions.

Founded in 1887, the AICPA is the world’s largest member association representing the accounting profession, with more than 412,000 members in 144 countries.