Introduction Until Notice 2023-27, the Internal Revenue Service (IRS) was silent about the tax treatment of nonfungible tokens (NFTs). When the IRS turned to NFTs, it focused on one aspect of NFTs: whether certain NFTs should be taxed as “collectibles.” This means that the government has sort of spoken about collectible NFTs, but it has remained silent on other aspects of taxing NFTs. Without comprehensive guidance, the door remains open for taxpayers to find creative ways to avoid taxes.

Originally published in Journal of Taxation of Financial Products - 2023.