Will the Bitcoin Become a New Tax Evasion Tool?


Will the Bitcoin Become a New Tax Evasion Tool?

by Joseph M. Donegan on August 19, 2013

Bitcoins, a controversial but highly popular global digital currency, is being used by more

consumers to make several types of transactions. Although no government has

recognized the bitcoin as a legitimate currency or placed concrete value on its use, the

anonymity afforded to bitcoin users, coupled with the growing trend of bartering them for assets that carry value, has drawn attention to the currency as a potential tax evasion tool.

A recent Yahoo analysis noted that "money" is not necessarily defined by production or

recognition and distribution by a government agency. Instead, the article argued that

money is typically defined as any tool that can enable financial transactions. Under this

expanded definition, the ubiquitous bitcoin may qualify, namely because it has and

continues to be used to transact real property, foreign currencies, barter, and financial

instruments. Whether this argument will hold up in a legal atmosphere is still

undetermined, but federal authorities - including the Internal Revenue Service - are

weighing these arguments carefully.

LOADING PDF: If there are any problems, click here to download the file.

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.

© Joseph Donegan, Scarinci Hollenbeck | Attorney Advertising

Written by:


Scarinci Hollenbeck on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.