Binance crypto exchange’s American venture - Binance.US - has partnered with global tax software leader Sovos. The partnership would see Sovos help Binance.US with its 1099 crypto tax information reporting needs by automating the forms and fillings for crypto investors. This would avoid hundreds of mechanical errors while also streamlining the filing process.
The IRS has not yet issued any guidelines as such in regards to 1099 form requirements for cryptocurrency reporting. Thus, crypto exchanges operating in the country are responsible for interpreting the existing regulations and taxes that the investors might be liable to pay.
Given the high volumes of trades being executed and the number of investors using the platform, it becomes increasingly difficult to manage an already complex field, and it proves to be a significant factor in the success of the company.
Joshua Sroge, interim CFO of Binance.US, commented their recent partnership with Sovos and said:
“The reporting obligations for cryptocurrency continue to evolve at a breakneck pace, often lacking clear guidance from regulatory authorities. By implementing Sovos, Binance.US can be assured of always having the latest changes pushed to us through an automated platform.
This industry will continue to evolve over the next several years, and having Sovos in our corner will ensure we provide the correct reporting guidance to our users.”
As a leader in income management and taxes, Sovos could prove to be vital for Binance.US in expanding its user growth and increase its user base, which is majorly dominated by the likes of Coinbase.
Tax calculations are complicated even for a common man. Imagine the burden of auditing a whole company. Still, Sovos has been in the business for a while and has developed a complete Intelligent Compliance Cloud. This is the first perfect solution for current tax, giving businesses a global solution for tax determination, e-invoicing compliance, and tax reporting.
Paul Banker, general manager of Tax and Regulatory Reporting at Sovos, said:
“As the rules and regulations around cryptocurrency tax reporting remain unsettled, the Sovos regulatory team continues to be at the forefront of changes so that we can help platforms like Binance.US quickly adjust to the reporting requirements and stay compliant.”