President Trump has signed into law a bill that repeals Internal Revenue Service (IRS) regulations that required decentralized finance (DeFi) platforms to be treated as brokers for purposes of reporting customer transactions.
Continue Reading Congress Overturns IRS Reporting Rules for DeFi Platforms
On Jan. 16, 2024, the U.S. Treasury Department and the Internal Revenue Service (IRS) announced the delay of the requirement for persons engaged in a trade or businesses to report information related to the receipt of digital assets on IRS Form 8300, Report of Cash Payments Over 10,000 Received in a Trade or Business.
Pursuant
On Aug. 25, 2023, the Internal Revenue Service (IRS) and the Treasury Department issued proposed regulations (the Proposed Regulations) regarding the sales or exchanges of digital assets, including cryptocurrency. The Proposed Regulations relate to both information reporting requirements and the determination of amount realized, basis, and backup withholding.
To address the tax implications for taxpayers who stake cryptocurrency on a proof-of-stake blockchain and receive validation rewards, on July 21 the Internal Revenue Service (IRS) issued Revenue Ruling 2023-14.
On Aug. 15, 2022, a federal court in the Central District of California authorized the Internal Revenue Service (IRS) to serve a John Doe summons on OX Labs Inc. d/b/a SFOX and its subsidiaries (collectively, SFOX). SFOX is a cryptocurrency prime dealer for professional traders and institutional investors and has over 175,000 registered users.
The IRS has not issued any clear guidance on the taxation of staking rewards. In 2014, the IRS issued Notice 2014-21, which provides that cryptocurrency is treated as property for federal tax purposes, but Notice 2014-21 and subsequent Revenue Ruling 2019-24 and frequently asked questions do not provide any further guidance on the tax treatment
The U.S. Senate passed its infrastructure bill (the “Bill”) that includes additional cryptocurrency reporting requirements, which are expected to generate $28 billion in revenue. The Bill currently does not provide the IRS with any additional funding to increase tax enforcement, as contemplated earlier. However, the Bill includes a provision on information reporting for cryptocurrency transactions
The IRS has published guidance stating that pre-2018 swaps among Bitcoin, Ether, and Litecoin are not eligible for 1031 tax-free exchange treatment. This means that investors who made swaps among these three cryptocurrencies before 2018 are liable for income tax on the gains realized. This guidance only applies to swaps before 2018, because the Tax
On May 20, 2021, the Treasury Department released a report that proposes new reporting requirements for transactions, including cryptocurrency transactions. Under the proposed plan, financial institutions, payment settlement entities, and digital asset exchanges and custodians would be required to report gross inflows and outflows that exceed a de minimis threshold on all business and personal
Recent John Doe summonses show the IRS is expanding its use of those summonses to aggressively investigate potential tax evasion. Within the past week, the IRS has received authorization to use a John Doe summons to request information from a cryptocurrency exchange. The government has also filed petitions in federal court seeking authorization to allow