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The Current Federal Tax Treatment of Cryptocurrency

In Bitcoin, Crytpocurrency by Jason Freeman and Jason CarrLeave a Comment

In 2014, the IRS announced that the use of convertible virtual currency to pay for goods or services in a real-world transaction has tax consequences.[1]Those consequences may result in a tax liability for the consumer. As a result—particularly in light of the IRS’s efforts to crackdown on failures to report cryptocurrency transactions, see here and here—it’s important to understand how cryptocurrency …

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Cryptocurrency—The IRS’s Next Big Crackdown

In Bitcoin, Blockchain by Jason Freeman and Alex AillsLeave a Comment

“Nothing is certain but death and taxes”—even when it comes to cryptocurrency. [1]  That time-tested insight, traditionally attributed to Benjamin Franklin, appears poised to go head to head with the technological innovations behind the cryptocurrency movement.  Cryptocurrency, such as Bitcoin, is virtual currency that uses cryptography for security.[2] It is not issued by any central governmental authority, rendering it—theoretically at …

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Bitcoin Forensics – The Facade of Anonymity

In Bitcoin, Blockchain by Jason FreemanLeave a Comment

Bitcoin and other virtual currencies are often thought to provide anonymity, allowing parties to move funds across the globe virtually without revealing their identity.  But that’s not exactly how it works.  Contrary to popular belief, Bitcoin is not anonymous; it is pseudonymous—and there’s a difference.  All Bitcoin transactions are linked to an address on a publicly-accessible Blockchain, a ledger of all …

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The IRS Believes Bitcoin Users are Evading Taxes, Tests Boundaries of John Doe Summons Procedure

In Bitcoin, Crytpocurrency by Jason FreemanLeave a Comment

The IRS recently filed a petition with a federal district court in the Northern District of California requesting leave to serve a “John Doe” summons on Coinbase, Inc., a U.S.-based Bitcoin exchange.  The summons would require Coinbase to turn over all of its records related to every convertible virtual currency transaction from 2013-2015—that information would include the names of owners, …

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Bitcoin and Beyond: The Reality of Taxing and Regulating Virtual Currency

In Bitcoin, Blockchain by Jason FreemanLeave a Comment

As published by Jason B. Freeman in Today’s CPA Magazine, available here. Bitcoin and other virtual currencies have become a growing part our modern economy.  Although their future remains a source of uncertainty—they could, after all, become anything from the future of finance, to the new “offshore banking system,” or just a defunct and failed experiment—this virtual phenomenon is a …