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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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Initial Coin Offerings (“ICO”) Regulation

In Bitcoin, Blockchain, Crytpocurrency by Jason Freeman and Spencer BanksLeave a Comment

Cryptocurrency[1] regulation has evolved into a complex patchwork.  There is currently no central federal regulator; instead, several agencies have taken an active role in developing the regulatory framework—though not all regulators have taken consistent approaches in their classification of cryptocurrency and related investment vehicles. This regulatory landscape can present challenges for companies seeking to employ virtual currency instruments.  Perhaps nowhere …

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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, Blockchain, and the Revolution to Come

In Bitcoin, Blockchain, Popular Posts by Jason FreemanLeave a Comment

We are in the midst of a revolution-a digital transformation driven by what many believe could be the most powerful decentralizing force since the rise of the Internet: Blockchain. It is difficult to overstate the potential impact of this technology and its applications. Much as the double-entry system of accounting-first codified by Luca Pacioli, the “father of accounting”-laid the groundwork …

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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 …