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Virtual Currency › Bitcoin › Tax Liability

Virtual Currency (aka Digital Currency or Digital Money) is a type of currency or medium of exchange that is not issued by any government nor guaranteed by a government currency. Despite lacking legal tender... more +
Virtual Currency (aka Digital Currency or Digital Money) is a type of currency or medium of exchange that is not issued by any government nor guaranteed by a government currency. Despite lacking legal tender status, Virtual Currency is still traded and exchanged in some environments, typically online environments or communities. Bitcoin is the most well-known form of Virtual Currency.    less -
Cadwalader, Wickersham & Taft LLP

First Stand-Alone Crypto Tax Fraud Case Leads to Guilty Plea

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On September 12, 2024, the U.S. Department of Justice (“DOJ”) announced that Frank Richard Ahlgren III pleaded guilty to filing a false tax return underreporting gains from selling $3.7 million in Bitcoin. As we discussed...more

Cadwalader, Wickersham & Taft LLP

Crypto: Give Unto Caesar What Is Caesar’s

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Earlier this year the U.S. Department of Justice (“DOJ”) brought USA v. Ahlgren, its first crypto case with tax evasion allegations unrelated to another crime, demonstrating the DOJ’s willingness to pursue stand-alone crypto...more

Wilson Sonsini Goodrich & Rosati

IRS Confirms That Staking Rewards Are Part of Gross Income

Wilson Sonsini Goodrich & Rosati on

On July 31, 2023, the Internal Revenue Service (IRS) released Revenue Ruling 2023-14, which provides that cryptocurrency stakers should include the value of the rewards they earn from staking in their gross income....more

Cadwalader, Wickersham & Taft LLP

IRS Says Crypto Protocol Changes Are Not Taxable

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On April 21, 2023, the IRS released Chief Counsel Advice Memorandum 202316008 (the “CCA”), which provides that cryptocurrency protocol changes are not treated as realization events and do not give rise to gross income for...more

ASKramer Law

Tax Return Reporting of Cryptocurrency

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You need to consider how you’ll report digital asset transactions on your 2022 tax returns. Tax reporting requirements for digital assets have changed yearly since 2019, when the IRS first added a question about crypto to IRS...more

BakerHostetler

The Tax Man Isn't Leaving: The IRS Continues to Issue John Doe Summonses Relating to Virtual Currency Transactions

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Key Takeaways - ..A court approved the issuance of a John Doe summons by the IRS to a bank aimed at identifying individuals who are potentially avoiding their income tax obligations relating to cryptocurrency...more

BakerHostetler

The Tax Man Is Back: IRS Issues First John Doe Summons in 2022 to Major Crypto Platform, Seeking Treasure Trove of Information on...

BakerHostetler on

Key Takeaways: ..The IRS issued its fourth John Doe summons against digital asset platform sFOX, seeking information regarding user identity and transaction activity over $20,000. ..The use of John Doe summonses...more

Cadwalader, Wickersham & Taft LLP

States Turning Eyes to Taxation of Cryptocurrency and Non-Fungible Tokens (NFTs)

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As the IRS ponders its approach to taxing cryptocurrency and NFTs, states are increasingly imposing taxes on some digital asset transactions, including the use of cryptocurrencies...more

Cadwalader, Wickersham & Taft LLP

Crypto Trading Safe Harbor – We’re On Our Own

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The District of Columbia Bar Tax Legislative and Regulatory Update Conference, a two-day conference on tax legislative and regulatory developments, included a one-and-a-half hour panel on taxation of cryptocurrencies and...more

Cadwalader, Wickersham & Taft LLP

NYSBA Tax Section’s Crypto Recommendations

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On April 18, 2022, the New York State Bar Association (“NYSBA”) Tax Section published its second report on cryptocurrency and digital assets (“the Report”). The Report recommends...more

Miller Nash LLP

Today In Tax: Uncertainties Surrounding Cryptocurrencies, Mining, NFTs, and More

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While the number of cryptocurrencies and other blockchain-based assets continue to grow, the IRS’s published guidance is inadequate in addressing how to tax these new digital assets and transactions involving them....more

Proskauer - Blockchain and the Law

Congress and the IRS Make Moves to Improve Taxpayer Compliance for Cryptocurrency Transactions

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IRS Commissioner Charles Rettig, testifying before Congress in April 2021, estimated the gap between taxes owed and taxes collected in the United States to be close to $1 trillion....more

Freeman Law

Crypto Mining and Retirement Accounts

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Crypto Mining and Retirement Accounts - Crypto mining has been extremely profitable over the last few years, with Bitcoin miners making an estimated $15 billion of revenue and several mining companies going public in 2021....more

Dechert LLP

U.S. Treasury Signals that Cryptocurrency Miners & Stakers Will Not Be Subject to Broker Information Reporting Tax Requirements

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On February 11, 2022, in a letter addressed to certain U.S. Senators, the U.S. Department of the Treasury indicated that cryptocurrency miners, cryptocurrency stakers or related hardware or software providers would not be...more

Kohrman Jackson & Krantz LLP

New Crypto Reporting Requirements Aim to Address Tax Gap

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As cryptocurrencies such as Bitcoin rise in popularity, government regulators repeatedly try, and often fail, to control its use as a tax shelter. Agencies such as the IRS struggle with determining the best way to tax...more

Foodman CPAs & Advisors

How the IRS Uses Social Media to Find Crypto Tax Cheats

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Does your Twitter, Reddit, Facebook, Instagram or other social media feed feature photos of your new sports car, boat, fabulous vacation or the beach house that you bought with your crypto gains? Do you also report a low...more

Foodman CPAs & Advisors

Bitcoin’s Limited Supply Increases Its Value. Should You Invest in Cryptocurrency?

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Macroeconomic concepts tell us that when supply of a valuable commodity is limited, demand for it will rise, and so will its price. Fiat currencies are backed by governments and central banks and more can be printed at will. ...more

Foodman CPAs & Advisors

How Will Virtual Currency Be Taxed?

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Despite the confusing interpretations by US regulators, non-compliance with crypto tax rules can cost taxpayers dearly. Unfortunately, the answer to “how is virtual currency taxed” depends on who you ask....more

Dechert LLP

Cryptocurrency Stakeholders Should Prepare for Increased Tax Enforcement

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As we recently noted in our OnPoint dated October 20, 2021, the rise in interest from retail and institutional investors in the cryptocurrency market has attracted increased regulatory and enforcement attention in the past...more

Foodman CPAs & Advisors

Subprime Market Redux: Will Leverage Be Crypto’s Downfall?

Foodman CPAs & Advisors on

I Predicted the Subprime Lending Bubble’s Collapse. The Signs Are The Same For Crypto. When I predicted the bursting of the housing market’s subprime lending bubble in 2006, a lot of people called me crazy....more

Foodman CPAs & Advisors

IRS Puts Brokers On The Hot Seat for Crypto Tax Reporting

Foodman CPAs & Advisors on

Definition of a broker is debated The Biden Administration’s 2021–2022 Priority Guidance Plan (the Plan) supports a push from the IRS and the US Treasury to more closely scrutinize the virtual currency industry....more

Foodman CPAs & Advisors

Debunking Five Myths About Cryptocurrency

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A surge in cryptocurrency prices this year created many crypto paper millionaires and brought millions into the game. But the digital currency market is a rollercoaster ride. As a result, many of those fortunes have already...more

Foodman CPAs & Advisors

The IRS Is Cracking Down On Cryptocurrency Tax Reporting

Foodman CPAs & Advisors on

If you’ve engaged in cryptocurrency or other virtual currency transactions worth $20,000 in any one year between 2016 and 2020, the IRS wants to hear from you. The IRS believes thousands of taxpayers are not telling the...more

McDermott Will & Emery

Finding John Doe, Part II: IRS Secures Another Victory to “Root Out” Virtual Currency Tax Noncompliance

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The Internal Revenue Service (IRS) has scored another significant victory in its rapidly increasing virtual currency tax enforcement efforts. On May 5, 2021, the US District Court for the Northern District of California...more

McDermott Will & Emery

IRS Releases Guidance on Cryptocurrency Hard Forks

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On April 9, 2021, the Internal Revenue Service (IRS) released Chief Counsel Advice memo 202114020 (Hard Fork CCA), which details the potential tax consequences for taxpayers who held Bitcoin prior to the August 1, 2017,...more

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