IRS Guidance Addresses Cryptocurrency Forks And Tax Treatment | Crowdfund Insider

The US Internal Revenue Service (IRS) has issued guidance today for “taxpayers who engage in transactions involving virtual currency.”

Expanding on guidance from 2014, the IRS is issuing additional guidance to help taxpayers better understand their reporting obligations for specific transactions involving virtual currency.

The new IRS guidance includes Revenue Ruling 2019-24 and frequently asked questions (FAQs).

The guidance addresses questions by taxpayers and tax practitioners regarding the tax treatment of a cryptocurrency hard fork. A set of FAQs address virtual currency transactions for those who hold virtual currency as a capital asset.

“The IRS is committed to helping taxpayers understand their tax obligations in this emerging area,” said IRS Commissioner Chuck Rettig. “The new guidance will help taxpayers and tax professionals better understand how longstanding tax principles apply in this rapidly changing environment. We want to help taxpayers understand the reporting requirements as well as take steps to ensure fair enforcement of the tax laws for those who don’t follow the rules.”

The new guidance supplements the guidance the IRS issued on virtual currency in Notice 2014-21.

The IRS said it is also soliciting public input on additional guidance in this area.

In Notice 2014-21, the IRS applied general principles of tax law to determine that virtual currency is property for federal tax purposes. The Notice explained, in the form of 16 FAQs, the application of general tax principles to the most common transactions involving virtual currency.

The IRS is aware that some taxpayers with virtual currency transactions may have failed to report income and pay the resulting tax or did not report their transactions properly. The IRS said it is actively addressing potential non-compliance in this area through a variety of efforts, ranging from taxpayer education to audits to criminal investigations.

In July of this year, the IRS began sending letters to approximately 10,000 taxpayers who may not reported, or erroneously reported, taxes on crypto transactions.

In some cases, the IRS warned, taxpayers could be subject to criminal prosecution.


IRS Cryptocurrency Forks rr-19-24





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IRS Guidance Addresses Cryptocurrency Forks And Tax Treatment | Crowdfund Insider
IRS Guidance Addresses Cryptocurrency Forks And Tax Treatment | Crowdfund Insider
IRS Guidance Addresses Cryptocurrency Forks And Tax Treatment | Crowdfund Insider
IRS Guidance Addresses Cryptocurrency Forks And Tax Treatment | Crowdfund Insider

IRS Guidance Addresses Cryptocurrency Forks And Tax Treatment | Crowdfund Insider

IRS Guidance Addresses Cryptocurrency Forks And Tax Treatment | Crowdfund Insider