AICPA offers new crypto guidance, IRS recommendations

The American Institute of CPAs has updated its practice aid, Accounting for and Auditing of Digital Assets, with new guidance on auditing stablecoins and cryptomining revenue, while separately asking the IRS to speed up its processes for changing names and addresses of taxpayers.

The August update contains a new chapter devoted to accounting considerations for stablecoin issuers. It deals with the recognition of obligations associated with issued tokens and considerations related to reserve assets that support stablecoins. The additional content comes in response to increased adoption of stablecoins and increasing demand from practitioners for guidance on accounting for these arrangements.

A new auditing chapter discusses the considerations related to mining revenue arrangements, such as transactions involving mining pool participants and data center hosts.

The guidance explains emerging revenue models that have become more prevalent across the digital asset field and provides auditors with more considerations and example procedures that can be performed when weighing these activities.

The practice aid has been updated to reflect AICPA auditing standards through Statement on Auditing Standards No. 148 and includes revisions related to SAS No. 146, Quality Management for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards (AU-C Section 220).

The updates aim to help accountants apply the newest quality management requirements and keep the guidance aligned with current professional standards.

Other updates include revisions to Chapter 5, Considerations for Existence, Rights and Obligations of Digital Assets, streamlining and consolidating the existing question-and-answer content without changing the underlying guidance.

The AICPA noted that digital assets are continuing to evolve as new transaction structures, use cases and business models emerge, and the updated practice aid is designed to help accounting and auditing professionals address these developments with greater clarity, consistency and confidence while applying existing accounting and auditing standards.

"As digital asset business models continue to evolve, practitioners are encountering increasingly complex accounting and auditing questions," said Diana Krupica, senior manager of digital assets, assurance and advisory innovation at the AICPA, in a statement Tuesday. "These updates provide additional clarity in areas where demand for guidance has grown and help professionals align their work with current standards and emerging practices."

IRS recommendations

Separately, the AICPA sent a letter Monday to the Internal Revenue Service recommending that the IRS modernize and automate the process for updating taxpayer names and addresses, which currently relies heavily on paper submissions and manual review. The AICPA also recommended the IRS create a secure electronic process through IRS online accounts that would allow taxpayers to submit and verify routine name and address changes in near real time using trusted third-party data sources, such as state business registration records and USPS address databases, while routing higher-risk requests for manual review. 

"Our members have indicated that IRS processing times for name and address updates range from six to eight weeks, and possibly longer," wrote AICPA Tax Executive Committee chair Cherie Freeh in the letter to IRS taxpayer services chief Kenneth Corbin and operations support director Kareem Williams. "Despite the fact that these updates are often routine and noncontroversial, the lengthy processing time introduces unnecessary compliance risks, administrative burdens, and even financial consequences for taxpayers. By prioritizing and automating this taxpayer account maintenance process, the IRS would effectively allow for the timely, accurate, and efficient updating of taxpayer information and the dedication of IRS resources to higher priority tax administration issues."