IRS Will Treat Convertible Virtual Currency As Property, Not Currency

more+
less-
more+
less-

On March 25, the IRS issued a notice in which it stated that, for federal tax purposes, bitcoins and other convertible virtual currencies are treated as property rather than currency. The IRS added that a third party that settles payments made in virtual currency on behalf of a substantial number of unrelated merchants that accept virtual currency from their customers may be a third party settlement organization (TPSO) and thus subject to IRS information reporting requirements. The IRS addressed several questions related to the use of virtual currency in the notice but acknowledged that there may be other questions regarding virtual currency not addressed that warrant consideration. The IRS is therefore accepting public comment on other types or aspects of virtual currency transactions that should be addressed by the IRS in future guidance. The notice does not specify a deadline for submitting such comments.

Topics:  Bitcoins, IRS, Virtual Currency

Published In: Finance & Banking Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BuckleySandler LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »