News & Analysis as of September 13, 2024

Digital Currency

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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 -

IRS Issues First Draft of Cryptocurrency Reporting Form

Freeman Law on 6/12/2024

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

FinCEN to Shed Light on Illicit Use of Virtual Currency Mixing Through Enhanced Record Keeping and Reporting Requirements

Troutman Pepper on 11/29/2023

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) recently announced a Notice of Proposed Rulemaking (NPRM) that identifies international convertible virtual currency mixing as a class of...more

Treasury Department Takes Aim at Convertible Virtual Currency Mixing

Freeman Law on 11/8/2023

The Treasury Department has recently issued a notice of proposed rulemaking under the Bank Secrecy Act regarding the reporting of convertible virtual currency (“CVC”) mixing....more

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

Amundsen Davis LLC on 10/4/2023

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

IRS Says Crypto Protocol Changes Are Not Taxable

Cadwalader, Wickersham & Taft LLP on 5/25/2023

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

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

Proskauer - Blockchain and the Law on 3/4/2022

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

OFAC advierte a la industria de Moneda Virtual

Foodman CPAs & Advisors on 3/4/2022

En una nueva Guía de Cumplimiento de Sanciones, la Oficina de Control de Activos Extranjeros (“OFAC”) del Tesoro de los EE. UU. reitera que las obligaciones de cumplimiento se aplican por igual a las transacciones que...more

Is Staking a Taxable Service?

Cadwalader, Wickersham & Taft LLP on 2/24/2022

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

Crypto asset providers – Italian regime finally decrypted

A&O Shearman on 2/23/2022

On 17 February 2022, the Ministry of Economy and Finance Decree (the MEF Decree) entered into force and lays out the procedure which entities acting as virtual asset service providers (VASPs) and e-wallet service providers...more

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

Dechert LLP on 2/17/2022

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

New Crypto Reporting Requirements Aim to Address Tax Gap

Kohrman Jackson & Krantz LLP on 2/11/2022

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

Cryptocurrency Stakeholders Should Prepare for Increased Tax Enforcement

Dechert LLP on 11/17/2021

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

The IRS Is Cracking Down On Cryptocurrency Tax Reporting

Foodman CPAs & Advisors on 7/20/2021

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

Cryptocurrency Tax Update

Bowditch & Dewey on 6/23/2021

The IRS continues its campaign against cryptocurrency investors and traders who evade income taxes on currency gains. As we wrote in 2016, the IRS was successful in compelling Coinbase, a large digital currency exchange, to...more

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

McDermott Will & Emery on 5/7/2021

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

IRS Releases Guidance on Cryptocurrency Hard Forks

McDermott Will & Emery on 5/6/2021

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

The Next Step: FinCEN Proposes to Require Reporting of Cryptocurrency Positions Held in Foreign Accounts

Orrick - On the Chain on 2/17/2021

FinCEN recently took another important step toward bringing virtual currency into the financial assets reporting scheme....more

Taxpayer Guidelines for Cryptocurrency in 2021

Gray Reed on 1/29/2021

Cryptocurrency is more accessible than ever before. Banks are continuing to both implement procedures for and, in some cases, develop their own cryptocurrencies. Paypal allows users in the U.S. to buy, sell and hold select...more

IRS Hints at Form 8938 Requirements for Reporting Crypto Assets Held at a Foreign Exchange

Orrick - On the Chain on 1/8/2020

With the emergence of digital assets, the question has arisen whether digital assets held in “wallets” in foreign exchanges need to be reported on Internal Revenue Service (IRS) Form 8938, Statement of Specified Foreign...more

IRS CI Highlights International Efforts to Tackle Cryptocurrency Abuse, Money Laundering and Tax Evasion

Ballard Spahr LLP on 12/10/2019

ABA Tax Fraud Panel to Discuss IRS CI and Crypto Criminals - The Internal Revenue Service – Criminal Investigation (IRS CI) has made it clear that it is focusing on the abuse of digital currencies to further tax evasion,...more

Virtual Currency: The Taxman is Coming

Holland & Knight LLP on 12/4/2019

Virtual currency transactions are now a prime focus of Internal Revenue Service (IRS) scrutiny. The IRS has numerous information-gathering tools to enforce its taxing power, including summons, artificial intelligence, data...more

Virtual Currency

Kramer Levin Naftalis & Frankel LLP on 12/3/2019

On Oct. 9, 2019, the Internal Revenue Service (the “Service”) issued Revenue Ruling 2019-24 concerning the tax consequences of virtual currency hard forks, as well as FAQs on the taxation of virtual currency generally. This...more

Taxpayers, have you sold, received, exchanged or acquired Virtual Currency?

Foodman CPAs & Advisors on 11/15/2019

During the month of October 2019, IRS issued Revenue Ruling 2019-24, FAQ’s on Virtual Currency Transactions and a DRAFT Form of Schedule 1, which, for the first time presents the question: “At any time during 2019, did you...more

Stick a Fork in It? IRS Issues Updated Guidance on the Tax Treatment of Cryptocurrency Forks and Provides Answers to a List of...

Polsinelli on 10/22/2019

Five years or so years ago, the Internal Revenue Service (“IRS”) provided its first, and until this week, only formal advice on the taxation of cryptocurrency transactions in Notice 2014-21. This guidance, while helpful in...more

Maltcoin - Using Malta Pension Plans to Manage Bitcoin and Crypto Currency Investments

Gerald Nowotny - Law Office of Gerald R.... on 8/22/2019

The Wall Street Journal reported recently that the IRS sent letters to over ten thousand taxpayers who own cryptocurrency for failing to declare income from trading cryptocurrencies. Basically, the IRS said, “We know who you...more

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