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Virtual Currency › Reporting Requirements › 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 -
McGlinchey Stafford

TIGTA Reports: Virtual Currency Tax Compliance Enforcement Can Be Improved

McGlinchey Stafford on

The number of virtual currency types has added to this problem. According to TIGTA, the number of virtual currencies has grown significantly since April 2020, from 5,000 to over 26,000 (420 percent) as of July 2023. The two...more

Foodman CPAs & Advisors

Práctica IRS Divulgación Voluntaria

Foodman CPAs & Advisors on

Los contribuyentes que intencionalmente han no han cumplido con obligaciones tributarias o relacionadas con impuestos pueden resolver su incumplimiento y limitar su exposición a un proceso penal presentando una solicitud a la...more

Freeman Law

IRS Issues First Draft of Cryptocurrency Reporting Form

Freeman Law on

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

Foodman CPAs & Advisors

Activos Digitales 2023 Formulario 1040

Foodman CPAs & Advisors on

El 01/22/24, el IRS le recordó a los contribuyentes que deben responder nuevamente a la pregunta sobre activos digitales 2023 en los formularios 1040 y 1040-SR y reportar todos los ingresos relacionados con activos digitales...more

Cadwalader, Wickersham & Taft LLP

Treasury Cries “Uncle” to Crypto Industry: Crypto Reporting Delayed

Cadwalader, Wickersham & Taft LLP on

On January 16th, the IRS published Announcement 2024-4 (the “Announcement”), postponing certain reporting requirements for large crypto transactions which were set to go into effect for the 2024 tax year.  Persons engaged in...more

Amundsen Davis LLC

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

Amundsen Davis LLC on

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

Cadwalader, Wickersham & Taft LLP

IRS Holds That Crypto Staking Rewards are Taxable Income

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The Internal Revenue Service (“IRS”) recently issued guidance in Revenue Ruling 2023-14, holding that taxpayers who stake their cryptocurrency and receive additional units of cryptocurrency as rewards when validation occurs...more

Cadwalader, Wickersham & Taft LLP

Playing the Waiting Game on Crypto Tax Reporting

Cadwalader, Wickersham & Taft LLP on

As previously discussed here, the IRS published guidance in December 2022 effectively postponing the January 1, 2023 effective date for certain digital asset broker reporting rules until final regulations are promulgated. To...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

Proskauer - Tax Talks

Recent Legislative Proposals and IRS Guidance on the Taxation of Digital Assets

Proskauer - Tax Talks on

This blog post summarizes recent federal bills that have been introduced (but not yet passed), proposals by the Biden Administration, and guidance issued by the Internal Revenue Service with respect to the taxation of digital...more

Cadwalader, Wickersham & Taft LLP

IRS Gets Serious About Digital Asset Reporting by Individuals

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Since 2019, Form 1040 has included a general question regarding the taxpayer’s cryptocurrency activity. Over the years, the IRS has modified the scope of its cryptocurrency inquiry. On the 2021 Form 1040, this question read:...more

Foodman CPAs & Advisors

Digital Assets 2022 Form 1040 Question Checklist

Foodman CPAs & Advisors on

Form 1040 2022 changes the crypto terminology from “virtual currency” to “digital assets”. The purpose of the change in terminology could be interpreted as a “head up” to taxpayers that the IRS is looking more closely as...more

Morrison & Foerster LLP

Global Developments in the Taxation and Reporting of Digital Assets

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Just 10 years ago, only your millennial, techie cousin had ever heard of, let alone purchased, any cryptocurrency. Fast forward to 2021, and the volume of cryptocurrency transactions has grown to $15.8 trillion....more

Foley & Lardner LLP

Warning to All U.S. Taxpayers Who Use Cryptocurrency: “Crypto” Doesn’t Mean Your Currency is Secret — or Protected — from the IRS

Foley & Lardner LLP on

On August 15, 2022, the federal court in the Central District of California authorized the IRS to serve a John Doe summons on SFOX, a cryptocurrency prime dealer headquartered in California. A John Doe summons is a device...more

Oberheiden P.C.

Tokenization Lawyer – 5 Reasons Why You Might Need One

Oberheiden P.C. on

What is Tokenization? Tokenization is the process of converting an asset into a token on the blockchain. It operates by dividing—or fractionalizing—the ownership of an asset (whether the asset is a piece of real estate or...more

Proskauer - Blockchain and the Law

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

Proskauer - Blockchain and the Law on

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

Dechert LLP

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

Dechert LLP on

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

How Will Virtual Currency Be Taxed?

Foodman CPAs & Advisors on

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

Dechert LLP on

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

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

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

Foodman CPAs & Advisors

Upcoming Virtual Currency FBAR and FATCA Reporting Enforcement

Foodman CPAs & Advisors on

Under current FinCEN regulations, a foreign account holding virtual currency is not reportable on the FBAR.  However, FinCEN in its FinCEN Notice 2020-2, proposes amending reports of foreign financial accounts (FBAR)...more

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