The new service comes on the heels of an announcement by the Internal Revenue Service (IRS) that it was changing the guidelines for how taxes were calculated. The IRS hasn’t changed the guidelines since 2014, when the crypto market was younger and there weren’t as many people holding digital assets.
“One of the first questions on the IRS’s tax form is whether you have crypto assets,” Lukka CEO Jake Benson said. “It is a question that taxpayers cannot ignore anymore.”
Investors can digitally submit records of transactions from crypto exchanges directly onto Lukka’s website, and the software will analyze the data and figure out the taxes.
Lukka partnered with CPA.com, which is a subsidiary of the American Institute of Certified Public Accountants, to offer the service. Benson said that the institute only picks one partner in every industry to work with, so the partnership is a significant one.
Lukka was formed in 2014 and was formerly called Libra, and it’s one of the first crypto investor accounting firms. It mostly serves institutional investors. The service costs about $20 for a year subscription, and about $10 if it’s bought before January.
It’s shuttering because of a new law called AMLD5, which forces cryptocurrency exchanges to follow the same regulations that other financial institutions, like banks, have to follow.
This would mean it would have to report suspicious activity to regulators and scrutinize customer behavior more closely.
“The amount and type of extra personal information we would be required to collect from our users would alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community,” a Bottle Pay spokesperson said. “Therefore, to maintain our integrity as service providers, and to protect the interests of our team, investors and users, we have taken the painful decision to shut Bottle Pay down completely rather than become subject to these new regulations.”