TaxBit and EY Announce Alliance to Support Tax Reporting Requirements for Digital Assets

Earlier today, TaxBit announced a strategic alliance with tax and accounting leader Ernst & Young LLP, commonly referred to as EY. Regulators are starting to demand more formal reporting practices as companies are increasingly engaging in digital asset transactions. The EY–TaxBit alliance provides organizations with a suite of solutions, along with services from EY US tailored to the digital asset ecosystem. At its core, the EY-TaxBit alliance enables:

• Streamlined aggregation and calculation of decentralized tax data to support clients’ tax reporting needs

• Integration with upstream and downstream systems to support the new Form 1099 and Crypto-Asset Reporting Framework (CARF) requirements

• Seamless interaction with EY and TaxBit’s broader set of services, enabling a broad suite of compliance solutions for the digital asset ecosystem

Increased transparency is critical to the evolution of the digital asset class – and innovative tax reporting solutions can help taxpayers and regulators address the estimated $50 billion tax gap. As regulatory clarity, a historically dominant concern for digital asset investors, emerges – EY-TaxBit’s solutions can help enterprises enable better user experience, avoid costly fines or audits, and promote industry transparency.

In support of the launch, Thomas Shea, EY Financial Services Crypto Tax Leader explains:

“While we’re seeing a ton of progress in Washington, there’s still uncertainty amongst the taxpaying community. The EY Digital Asset Tax Suite attempts to bridge the current gap and assist those engaging the digital asset market in meeting their tax reporting obligations.”

After great anticipation, the US Treasury will soon release proposed guidance for how exactly the Infrastructure Investment and Jobs Act (IIJA), passed by Congress in November 2021, will be applied. The new rules will have extensive implications for crypto enterprises and are ultimately designed to facilitate tax transparency to the taxpayer and the IRS. Digital asset exchanges and crypto protocols operated by centralized entities should prepare today.

TaxBit and EY are building a series of industry-leading solutions for ever-evolving regulatory needs. TaxBit’s series of solutions for the upcoming IIJA requirements include:

• Identity Verification can significantly reduce operational costs and improve your customer’s experience via simple W-9 (and W-8BEN) form collection and automated TIN verification that is matched against the IRS’ TIN database

• Information Reporting product seamlessly enables the ultimate generation and filing of Form 1099 (B or DA) to individuals and the IRS

• Cost Basis Interchange provides cost-basis sharing and transfer statement reporting for digital asset brokers for a seamless tax reporting experience 

Building on the partnership, Lindsey Argalas, TaxBit’s COO concludes:

For more information, visit ey.com/alliances.