News & Analysis as of November 19, 2024

Tax Planning

+ Follow

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 -

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

Cadwalader, Wickersham & Taft LLP on 10/24/2024

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

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

Playing the Waiting Game on Crypto Tax Reporting

Cadwalader, Wickersham & Taft LLP on 6/28/2023

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

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

IRS Gets Serious About Digital Asset Reporting by Individuals

Cadwalader, Wickersham & Taft LLP on 4/27/2023

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

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

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

How the IRS Uses Social Media to Find Crypto Tax Cheats

Foodman CPAs & Advisors on 1/25/2022

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

How Will Virtual Currency Be Taxed?

Foodman CPAs & Advisors on 11/17/2021

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

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

IRS Puts Brokers On The Hot Seat for Crypto Tax Reporting

Foodman CPAs & Advisors on 11/4/2021

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

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

Upcoming Virtual Currency FBAR and FATCA Reporting Enforcement

Foodman CPAs & Advisors on 7/8/2021

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

Did You Engage In Virtual Currency Transactions In 2020?

Foodman CPAs & Advisors on 5/5/2021

Taxpayers who engaged virtual currency transactions in 2020 must answer a Yes or No Question on page 1 of Form 1040 or Form 1040-SR. The question is: “At any time during 2020, did you receive, sell, send, exchange or...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 Advises that Virtual Currency Received in Exchange for Microtasking is Subject to Ordinary Income Tax and Self-Employment Tax

Polsinelli on 10/8/2020

As discussed in previous blog entries , the IRS has been engaged in an ongoing campaign intended to address noncompliance related to the use of crypto currencies, including a virtual currency compliance campaign spearheaded...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

IRS provides long-awaited cryptocurrency guidance

Eversheds Sutherland (US) LLP on 10/18/2019

On October 9, 2019, the Internal Revenue Service (IRS) issued guidance addressing select issues involving the tax treatment of virtual currency transactions and reminding taxpayers of their reporting obligations. The...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

IRS Is Sending “Educational” Letters To Virtual Currency Owners Advising Them To Report Crypto Transactions Properly And Pay Tax

Cole Schotz on 8/6/2019

In a news release on July 26, 2019, the IRS announced that it was sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax. See IR-2019-132. The...more

Watch Your Mailbox: IRS Letters Warning of Cryptocurrency Non-Compliance on Their Way

McDermott Will & Emery on 7/31/2019

On July 26, 2019, the Internal Revenue Service (IRS) issued a press release informing the public that it is sending more than 10,000 letters to taxpayers with potentially unreported (or misreported) virtual currency...more

48 Results

View per page

Page: of 2

Virtual Currency › Reporting Requirements › Tax Planning

"My best business intelligence, in one easy email…"