Taxation of cryptocurrencies in anticipation of the IRS’s call

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With the rise of cryptocurrencies and virtual currencies, the IRS is keen to learn more about the application and uses of these virtual currencies and is once again flexing the agency’s investigative and enforcement muscles to track down non-compliant taxpayers.

Taxpayers should seriously start (if they haven’t already) reviewing their transactions using cryptocurrencies and assess early on (i.e., before the IRS contacts them) what are the correct U.S. federal income tax consequences to transactions they have concluded using cryptocurrencies.

To help bridge a gap between the available government guidance and what remains open and subject to interpretation — ergo, causing confusion for taxpayers’ compliance initiatives, this report provides a general overview of the U.S. federal income tax consequences and reporting requirements relating to transactions involving cryptocurrencies. Read our report now.