Crypto and taxes — reporting requirements, IRS enforcement, and what digital asset holders need to know at tax time.
The evolution of cryptocurrency and the blockchains that power it has taken yet another step forward with the creation of NFTs or non-fungible tokens. NFTs have been in the news quite a lot lately, garnering support from some of the biggest names in art, sports, and technology. However, with NFT marketplaces come potential tax liabilities….
Cryptocurrency is once again making big waves in the news thanks to Bitcoin and Dogecoin riding high, Tesla accepting payment in the form of Bitcoin, and the IRS asking about it on your tax forms. But without proper guidance from the IRS, there are still plenty of questions surrounding crypto taxes and the specifics of…
For years, Treasury has advised taxpayers that virtual currency is not required to be reported on the Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts, or what used to be called the FBAR. That appears to be changing. FinCEN has now announced an intention to amend the rules to…
Cryptocurrency is a digital or virtual currency. Essentially, it was created to offer a system to enable peer to peer payments without the need of a third party, offering security and a measure of anonymity. For federal income tax purposes, it’s treated as a capital asset. And what you don’t know could hurt you since…
When the Internal Revenue Service (IRS) signaled that it was getting serious about cryptocurrency, the agency wasn’t kidding. The IRS is now offering cash to anyone who can “reliably produce useful results on a variety of real-world CI cryptocurrency investigations involving Monero and/or Lightning.” That’s right: they are looking for code crackers. The IRS has…
The Justice Department has announced action against two hacks of virtual currency exchanges by North Korean actors. According to court documents, the actors stole millions of dollars’ worth of cryptocurrency and laundered the funds through Chinese over-the-counter (OTC) cryptocurrency traders. Now, the Justice Department is seeking to recover those funds through the filing of a…
The Justice Department has announced the dismantling of three terrorist financing cyber-enabled campaigns. These actions represent the government’s largest-ever seizure of cryptocurrency relating to terrorism. These three terror finance campaigns – involving the al-Qassam Brigades, Hamas’s military wing, al-Qaeda, and the Islamic State of Iraq and the Levant (ISIS) – all relied on sophisticated cyber-tools, including the…
It’s my annual Taxes from A to Z series! If you’re wondering how to figure basis for cryptocurrency or whether you can claim home office expenses during COVID, you won’t want to miss a single letter. C is for Cryptocurrency reporting. Last year, the Internal Revenue Service (IRS) announced a new cryptocurrency compliance measure for…
The Internal Revenue Service (IRS) has announced the indictment of Michael Rahim Mohammad, a Dutch national. Mohammad, sometimes called “Mr. Dark,” has been accused of operating Dark Scandals, websites that featured violent rape videos and depictions of child pornography. According to court pleadings, Mohammad was the administrator of the DarkScandals Sites, which he began operating in or…
Gamers (and their parents) can finally breathe a sigh of relief: Fortnite virtual currency is not taxable. If you’ve seen headlines suggesting that it is taxable – and then contrary headlines saying that it is not – here’s what happened. In October of 2019, the following language was spotted on the Internal Revenue Service (IRS) website (archived…
