On May 21, ConsenSys, the company that owns the Ethereum wallet known as MetaMask, announced that it does not collect taxes from users of cryptocurrencies. On Twitter, ConsenSys stated, “Let’s clarify one thing upfront: MetaMask does NOT collect taxes on cryptocurrency transactions and we have not made any changes to our terms to do so.”
It has been made clear that ConsenSys only collects sales taxes on specific paid services, such as subscriptions to the Ethereum API Infura that are paid for using a credit card. It was stated there would be no application of tax-related terms to MetaMask or any other products that did not incur sales tax.
The company further stated that it is “aware of tweets circulating with inaccurate information” in relation to its terms of service and asserted that those “claim[s] are false.” Earlier, members of the cryptocurrency community voiced their concerns regarding the terms of service provided by MetaMask and ConsenSys. These terms imply that certain parties are obligated to pay taxes in addition to any other fees, penalties, interests, and charges that may be imposed by the government.
Some rumors even suggested that MetaMask could potentially freeze user funds for reasons related to taxes. However, there is no language in the terms of service that suggests this, nor is there any code that would enable the project to freeze user funds. Neither of these things are present.
Even though users of MetaMask are exempt from paying sales tax, investors in cryptocurrencies are required to report and pay taxes on any capital gains they make in the majority of jurisdictions.
The Internal Revenue Service (IRS) of the United States receives information regarding trading activity from a number of important exchanges, including Coinbase and Binance. The US. These businesses typically offer their customers access to various tax forms that can be utilized by the customer in the completion of their own individual tax returns.
It is not clear whether the Internal Revenue Service has ever received helpful information from MetaMask or ConsenSys. They have however acknowledged that users should be responsible for paying taxes.
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