I'm Darrin Mish. For 32 years I've practiced federal tax litigation — routine audits, Tax Court cases, and everything in between. If you're facing an IRS issue, here's what you need to know first.
According to the Commodity Futures Trading Commission, bitcoin is a currency. Bitcoin is currently the world’s largest cryptocurrency.
When bitcoin is used with a capital “B” the reference is to systems and software. When bitcoin is used with a little “b” money is being referenced. The IRS formally declared bitcoin as a property, and not currency. As you see, there are two government agencies that are not on the same page.
Here’s why! The CFTC recently investigated and charged a bitcoin shop that was allowing individuals to trade bitcoin options. This action clearly placed bitcoin under the jurisdiction of the CFTC. The charges have since been settled by the CFTC.
Bitcoin is still a mystery to many in a financial world that is already too complex for the average individual to comprehend. As bitcoin gains in popularity, and if it is viewed as currency, you can only expect there to be tax considerations.
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