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Virtual Currency › Digital Currency › Internal Revenue Service

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

Freeman Law

IRS Issues First Draft of Cryptocurrency Reporting Form

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The IRS appears to be on the verge of changing the way digital asset (i.e., cryptocurrency) transactions are reported for federal tax purposes. On April 19, 2024, the IRS issued its first draft of Form 1099-DA, the intended...more

BakerHostetler

Weekly Blockchain Blog - April 2024 #5

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Hong Kong Approves Crypto ETFs; Crypto Security, Payments Products Launch - According to recent reports, the Hong Kong Securities and Futures Trading Commission has conditionally approved the launch of the first spot...more

Amundsen Davis LLC

Will the Proposed IRS Regulations Hinder the Growth of Tokenization in Real Estate?

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As digital currency grows in use and acceptability, digital currency has entered into many traditional investment markets. Commercial real estate is no exception. The conversion of real estate assets to digital tokens using...more

Lowenstein Sandler LLP

IRS Rules That Cryptocurrency Staking Rewards are Taxable

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The Internal Revenue Service (IRS) has ruled that a cash-method taxpayer that stakes cryptocurrency native to a proof-of-stake blockchain is subject to tax on additional cryptocurrency it receives as rewards when validation...more

Cooley LLP

IRS Releases Guidance on Cryptocurrency ‘Staking’ Rewards

Cooley LLP on

On July 31, 2023, the Internal Revenue Service (IRS) released Revenue Ruling 2023-14, which addresses the US federal income tax treatment of cryptocurrency units (commonly referred to as coins or tokens) that are received by...more

Wilson Sonsini Goodrich & Rosati

IRS Confirms That Staking Rewards Are Part of Gross Income

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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

BakerHostetler

Kraken Loses Bid To Avoid Turning Over Customer Information to IRS

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In a recent ruling, a California federal judge held that Kraken, an online cryptocurrency exchange program, has to turn over user information to the IRS as a result of a John Doe summons originally served on Kraken in 2021....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

Cadwalader, Wickersham & Taft LLP

Cryptocurrency Is Property Not Currency Even if Legal Tender, Per IRS

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In Notice 2014-21, the IRS announced its position that cryptocurrencies constitute property for tax purposes, rather than foreign currency, and observed that while cryptocurrency may operate like “real” currency in some...more

Kilpatrick

IRS Publishes Advice Concerning Cryptocurrency that has Declined in Value

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On January 13, 2023, the Internal Revenue Service (IRS) Office of Chief Counsel published Memorandum 202302011 titled “[a]pplicability of I.R.C. section 165 to cryptocurrency that has declined in value.” The Memorandum...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...

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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

Blank Rome LLP

Cryptocurrency as Compensation: A Tax Primer

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Compensating employees with cryptocurrency raises many of the same tax issues as compensating employees with employer stock and, therefore, requires thoughtful planning on the part of both the employer and the employee, says...more

McGuireWoods LLP

Enforcers Eye Crypto Tax Cheats, Their Accountants and Lawyers

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As tax season approaches, cryptocurrency investors and their advisors are facing heightened scrutiny. The New York State Office of the Attorney General recently announced its commitment to hold “cryptocurrency tax cheats...more

BakerHostetler

[Podcast] Blockchain University: Relationship Drama: Cryptocurrencies, Blockchain and the Law

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Our fifth episode provides an overview of the key legal issues facing cryptocurrencies and blockchain in the U.S....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

Cadwalader, Wickersham & Taft LLP

Is Staking a Taxable Service?

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On February 3, the Proof of Stake Alliance (“POSA”), a cryptocurrency industry association, issued a press release regarding recent developments in a cryptocurrency tax case, in which the IRS approved the tax refund sought by...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

Freeman Law

Taxation of Crypto Mining

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Amid the crypto boom, mining has become an extremely lucrative venture for many and critical to maintaining decentralized cryptocurrency networks. It is no surprise then that mining has been subject to IRS scrutiny and...more

BakerHostetler

Financial Firms Plan Decentralized Exchange, Launch Digital Bond; NFTs Launch in Sports, Fashion; Blockchain Tracing Solutions...

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US and Swiss Financial Firms Announce Decentralized Exchange, Digital Bond - A major U.S. fintech and digital payments company recently released a white paper detailing tbDEX, a new decentralized protocol for exchanging...more

Freeman Law

The Taxation of Stablecoins

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Over the past few years, cryptocurrencies such as Bitcoin and Ethereum have received the lion’s share of attention from crypto enthusiasts and investors, sending the price of these coins to new highs. The price of...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?

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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

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