Gemini, one of the world’s most trusted cryptocurrency exchanges and custodians, has selected Sovos, the largest private filer of 10-series tax forms, to automate Gemini’s 1099 forms and filings. Sovos will enable Gemini to eliminate potential errors and get automatic regulatory updates on the everchanging cryptocurrency compliance landscape.
The growing confusion related to crypto tax reporting obligations continues to plague crypto or digital currency exchanges. And that confusion can lead to negative tax consequences for taxpayers, too. The IRS only recently issued clarification on how individual taxpayers should handle paying taxes on crypto assets, but it has not yet revealed how exchanges such as Gemini should manage tax information reporting on Form 1099.
IRS shows signs of cracking down on crypto
Even before the IRS issued guidance to individuals, the agency made clear that it would levy penalties to taxpayers who failed to report income and pay taxes on crypto transactions. Crypto exchanges could face the same issue. Although IRS reporting regulations for exchanges are still unclear, the agency could take action to punish exchanges as soon as it makes clarification available and possibly even earlier.
Gemini protects customers, stays ahead of competitors
In choosing Sovos as a partner for tax reporting, Gemini has made a decision to mitigate potential IRS penalty risk and prepare for any forthcoming guidance from the IRS on crypto tax reporting. By partnering with Sovos, Gemini ensures that its customers will receive the tax information they need to report crypto transactions to the IRS at a time when the agency is cracking down on individual taxpayers. This commitment to compliance demonstrates one way Gemini has set itself apart in the cryptocurrency industry.
In addition to industry-leading customer service, businesses like Gemini that choose experienced partners for tax reporting are safeguarding themselves from the costly and time-consuming process of trying to manually comply with new and unclear crypto reporting regulations as they happen.
Discover how Sovos can safeguard your business and help you avoid the risks of uncertain cryptocurrency regulations.
Find out how Sovos ensures compliance in multiple aspects of 1099 reporting, including crypto tax reporting.