When it comes to determining the exchange rate for international tax returns and information returns, the Internal Revenue Service (IRS) does not have any official exchange rates. Instead, you should use any published type of exchange rate that is used consistently. This could include the average Treasury Department, Internal Revenue Service, X-Rate and OANDA rates. When valuing a foreign currency that uses multiple exchange rates, you should use the rate that applies to your specific facts and circumstances.
This means that you can choose an exchange rate, such as the average Treasury Department, Internal Revenue Service, X-Rate and OANDA rates. However, this does not mean that you can actually obtain that exchange rate in the foreign country. For tax payments in a foreign currency, the exchange rate used by the IRS to convert foreign currency into U. S.
dollars is determined by several factors. To minimize scrutiny, taxpayers should consider using Treasury Department exchange rates. The exchange rate a person uses may change depending on the type of income, assets, or accounts they report. Exchange rates are defined as the price of one country's currency in relation to another country's currency.
Two of the most common exchange rates used by individuals are the average exchange rate of the Internal Revenue Service and the Department of Exchange (published quarterly). For additional exchange rates not listed below, see the government and external resources listed on the Foreign Currency and Currency Exchange Rates page or any other published exchange rate (which is used on an ongoing basis).