EY Teams Up with TaxBit to Unlock the Power of its Crypto Reporting Solution

Quick take:

• Ernst & Young has collaborated with TaxBit to bring crypto tax reporting services to the corporate world.
• The two companies are addressing a new that is merging amid increased crypto regulations.
• The EY-TaxBit Alliance will provide clients with a suite of solutions that helps them to comply with regulations.

Ernst & Young (EY) has teamed up with TaxBit to launch a crypto reporting service for corporations. The announcement comes amid the increased regulation in the crypto industry as more mainstream companies continue to make their first foray.

According to the announcement, the EY-TaxBit Alliance seeks to offer support to corporations seeking to comply with new crypto regulations. 

TaxBit is one of the world’s leading tax and accounting technology providers for crypto and other digital assets like NFTs.

A non-fungible token (NFT) is a blockchain-based file representing proof of ownership of a digital collectible, JPEG, artwork or virtual avatar. However, some NFT investors see the industry as an opportunity for traders that seek to buy NFTs during an auction and sell in the secondary market for a profit.

While some countries have outlawed secondary trading of NFTs for profits, others including the US have taken a different approach, instead choosing to treat them like any other digital asset.

Just recently, the US IRS (Internal Revenue Service) updated its treatment of NFTs categorising them under digital assets. Under the new Infrastructure Investment and Jobs Act provisions, digital asset traders and investors are required to report payments of over $10,000 received in a trade or business.

The EY-TaxBit Alliance will provide organisations with a suite of solutions that will help them comply with evolving crypto regulations. The solution will help in matters relating to IRS tax filings, meeting regulatory deadlines, and implementing various crypto and tax accounting software quicker.

The alliance is part of the EY Digital Asset Tax Suite. The US accounting and financial services company wants to use the partnership to activate its Digital Asset Customer Tax Operations solution, which combines TaxBit’s software with various EY solutions including electronic Tax Form Validator (eTFV), Customer Tax Data Master (CTDM) and Withholding & Reporting Calculator.

Thomas Shea, EY Financial Services Crypto Tax Leader, Ernst & Young LLP, commented: “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.”

EY’s tax analyzer is an interactive solution that simplifies tax reporting for transactions related to the purchase and sale of digital assets. The tool pools data directly from on-chain applications and marketplaces for decentralised finance (DeFi), NFTs, and blockchain gaming, among others.

Commenting on the alliance, Lindsey Argalas, COO, TaxBit, said: “At TaxBit, we are focused on providing enterprises a single system of record to manage digital assets tax and accounting. Our alliance with EY US bolsters our solutions by integrating world-class expertise, services and support. We look forward to working alongside the EY US team to enable compliant digital asset adoption for the global economy.”

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