Taxing Bitcoin and Blockchains—What the IRS Told Us (and What It Didn’t)

Tax Notes Federal, p. 241, January 13, 2020

U of Penn, Inst for Law & Econ Research Paper No. 20-01

22 Pages Posted: 1 Feb 2020

See all articles by David J. Shakow

David J. Shakow

University of Pennsylvania Law School

Date Written: January 13, 2020

Abstract

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

Shakow, David J., Taxing Bitcoin and Blockchains—What the IRS Told Us (and What It Didn’t) (January 13, 2020). Tax Notes Federal, p. 241, January 13, 2020; U of Penn, Inst for Law & Econ Research Paper No. 20-01. Available at SSRN: https://ssrn.com/abstract=3529349

David J. Shakow (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

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