Taxing Bitcoin and Blockchains—What the IRS Told Us (and What It Didn’t)
Tax Notes Federal, p. 241, January 13, 2020
22 Pages Posted: 1 Feb 2020
Date Written: January 13, 2020
The IRS recently issued its second description of how it will treat Bitcoin and other blockchain assets. Some of its analysis leaves open questions that invite further consideration, and important issues remain unresolved. Moreover, because the popular Bitcoin blockchain uses a "proof of work" consensus procedure, issues relating to the alternative "proof of stake" procedure have been neglected.
Keywords: law & economics, income taxation, securities registration, cryptocurrency, blockchain, Internal Revenue Service, IRS, Securities & Exchange Commission, SEC, location of economic activity, business entities, proof of work, PoW, proof of stake, PoS, decentralized autonomous organization, DAO
JEL Classification: E42, G28, H24, K22, K34
Suggested Citation: Suggested Citation