LibraTax Announces $500K Funding for IRS Compliant Bitcoin Tax Prep

Journalist:
October 11, 2014

LibraTax, a Bitcoin tax compliance solution for businesses, recently closed a $500K USD seed funding round. LibraTax’s seed funding was headed by Liberty City Ventures; other seed funders include Raptor Ventures’ managing director James Pallotta and BitGo CPO Ben Davenport.

LibraTax’s CEO Jake Benson envisions building a core product for Bitcoin tax compliance with the raised funds. Bitcoin businesses and certified CPAs need to be able to interface easily in order for Bitcoin to succeed in the mainstream.

Also read: LibraTax Opens to the Public; Bitcoin Tax Nightmare Just Got Easier

When Libra first announced their product in August, Bitcoin tax regulations were still being clarified around the world. The IRS has officially released a Virtual Currency Guidance as of this year and will undoubtedly be targeting Bitcoin businesses that do not pay taxes. Though some argue that the current IRS ruling is convoluted and contradictory when compared with other Bitcoin treatments from other arms of the US Government, compliance is still needed. This is exactly the space in which Libra saw an opportunity: Benson has been on the move ever since. Libra said:

“The recent guidance given by the IRS in March to treat digital currency as property requires that taxpayers report digital currency gains and losses on state and federal returns,” Libra said. “Taxpayers and tax professionals alike have been uncomfortable and encumbered with this manual calculation because it is extremely time-consuming and prohibitively difficult.”

Doing Your Bitcoin Taxes

Libra works with other Bitcoin companies such as Coinbase and Blockchain to provide their Bitcoin tax services to consumers as well as businesses. Libra has been in a closed beta with certified CPAs around the country to test Libra’s software. Now, the software is ready to be used in the wild. LibraTax offers two tiers of services. Up to 500 transactions can be processed (taxes calculated) for free. Larger consumers (merchants) that require tax information on more transactions can pay $19 for 5000 transactions.

Images from Shutterstock.

Last modified (UTC): October 11, 2014 22:25

Tags: bitcoin tax
Caleb Chen @bitxbitxbitcoin

Caleb is a graduate of the University of Virginia where he studied Economics, East Asian Studies, and Mathematics. He is currently pursuing his MSc in Digital Currency at the University of Nicosia.