The crypto space (or the “virtual currency” space as it is referred to by the IRS) has rapidly ascended into a multibillion dollar market since its creation a little more than a decade ago.  Despite its rapid growth, few people understand even the rudimentary elements of cryptocurrency.  The combination of multiple cryptos’ rapid growth and the lack of basic knowledge by a majority of the population has created an environment with a lot of unanswered regulatory questions, and, where it exists, confusing and sometimes misguided answers.   

Unfortunately, the IRS, like most governing bodies trying to regulate in the space, has not kept up with the rapid evolution of crypto.  And, regrettably, the tax guidance that has been issued to date in certain instances fails to recognize the complexities and novelties presented by some scenarios created by the crypto space.  With the growth of the market far exceeding the IRS’ guidance on the topic there is an obvious need for tax specialists in the space to assist employers and individuals.

For the first time in 2019 the IRS is asking individuals on their individual tax returns if the taxpayer received, sold, sent, exchanged, or acquired any financial interest in a “virtual currency.”  This question at the top of Schedule 1 of the Form 1040 is a clear indication that the IRS is planning to look with intensified scrutiny at those operating in the crypto space.  Therefore, it is more paramount than ever that individuals and employers operating in the crypto space are compliant with the US tax code.

Our goal is to help our clients operating in the crypto market to be in full compliance with the US tax code.  Furthermore, we offer our clients crypto planning advice regarding future taxable events or crypto transaction to optimize our clients’ outcome by efficiently utilizing the US tax code.

Additionally, it is our mission to assist the government in shaping the US tax policy on crypto.  Our publications have two goals.  First, to examine and teach the basic US tax principles as applied to the crypto space.  Many basic US taxation principles can be applied to crypto scenarios.  Second, we plan to publish about challenging and novel taxation questions created by the crypto space.  It is our hope that the latter helps shape future guidance where it is critically needed for the US crypto business market to continue to grow and evolve in the United States.

If you have any questions or topics you would like to see discussed, please contact us.