Government Reports, Advisories, Hearings, Etc.


State Information

  • ​Arizona HB 2417 (Chapter 97; 3/29/17) - Per the Senate Fact Sheet, "establishes guidelines for blockchain technology regarding electronic signatures and records." Also allows for "smart contracts."  Defines "blockchain technology" as "distributed ledger technology that uses a distributed, decentralized, sharee and replicated ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless. The data on the ledge is prtected with cryptography, is immutable and auditable and provides an uncensored truth." Defines "smart contract" as "an event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger and that can take custody over and instruct transfer of assets on that ledger."
  • California BOE Special Notice L-382 (June 2014) - If use virtual currency to buy a taxable item, sales tax owed based on the sales price of the item purchased.
  • California Dept of Business Oversight, Advisory on virtual currencies, 4/30/14 - press release + text
  • Colorado SB 18-086 (5/30/18) - Dept. of State must consider blockchain tech when accepting business licensing records and in distributing state data to other agencies.
  • Delaware Blockchain Initiative launched in May 2016 by Governor Markell to attract this technology to the state and explore "distributed ledger shares" to be authorized by Delaware corporations.
  • Florida court rules Bitcoin is not money - The State of Florida v Espinoza, F14-2923 (11th Judicial Circuit, 7/22/16) - see ruling in this 7/25/16 Miami Herald article. This is a money services business ruling, not a tax one. The court explained Bitcoin and stated: "This Court is not an expert in economics, however, it is very clear, even to someone with limited knowledge in the area, that Bitcoin has a long way to go before it is the equivalent of money. ... Bitcoins ... are not monetary instruments." Thus, the court found that rather than exchanging money, the person sold property.
  • Illinois Blockchain Initiative.
  • Kansas Office of the State Bank Commissioner Guidance Document MT 2014-01 (6/6/14) - in some cases, exchange might be considered money transmission
  • Michigan - Sales tax information in Treasury Dept's Nov. 2015 newsletter
  • Missouri LR 7411 (9/12/14) - no sales tax imposed when customers obtain bitcoin from ATM because the bitcoin is intangible.
  • Nevada - SB 398 (Chapter 391; 6/5/17) allow blockchain tech as electronic record of Uniform Electronic Transactions Act, prohibit local gov't from taxing or restricting use of blockchain.
  • New Jersey - TAM 2015-1 (4/2/15)
  • New York - sales and income tax treatment of virtual currency - TSB-M-14(5)C, (7)(I, (17)S (12/5/14)
  • New York Attorney General launches Virtual Markets Integrity Initiative (April 2018) described as "a fact-finding inquiry into the policies and practices of platforms used by consumers to trade virtual or “crypto” currencies like bitcoin and ether" to provide "the accountability and transparency in the virtual currency marketplace that investors and consumers deserve.”  Press release + survey sent to 13 platforms + final reportBitcoin.com's 9/19/18 article on 8 surprising findings from the initiative.
  • New York Public Service Commission news release 7/12/18 - higher utility rate allowed for those involved with cryptocurrency mining or providing the computer capacity for it.
  • New York State, Dept of Financial Services
  • Ohio starts taking bitcoin for tax payments (Nov. 2018)
  • Texas Dept of Banking, Supervisory Memorandum 1037 (4/3/14) - generally finds that exchanging virtual currency for sovereign currency is not a currency exchange under Texas law.
  • Vermont - several new laws and activities:
    • S 269 (Act. No. 205; 5/30/18) on blockchain business development, including creation of blockchain-based LLCs and a study on possible use of blockchain for government records.
    • Center for Legal Innovation at Vermont Law School, Financial Tech Report for legislature, 12/7/17
    • H. 182 (Act 22; 5/4/17) on rules for money transmitters including virtual currency.
  • Washington Department of Revenue - Interim Statement Regarding Bitcoin: Payments, Mining, and Investment Income, 8/20/19
  • Wyoming, SF 111, Chapter 45 (3/10/18) - virtual currency is not subject to personal property tax.

Virtual Currency & Blockchain Technology

IRS Guidance and Government Reports on Taxation 


  • Rev. Rul. 2019-24 (10/9/19) on forks and airdrops (but not as clear as we need)
  • FAQs created on 10/9/19 on Notice 2014-21, Rev. Rul. 2019-24 and a few new topics (some of
    these present new rules and should really have been in proposed regs such as the suggestion
    that it is ok to use FIFO to track use of virtual currency).
  • 2019 IRS Schedule 1 includes a new question: "At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?"  The 1040 instructions (p 81) provide more information on this question including what is considered a transaction involving virtual currency. Note: Not all individuals are required to file this schedule. It appears though that if anyone has to answer "yes" they must file the schedule. The instructions do say that if the answer is "no" and you don't otherwise have to file Schedule 1, you can skip filing it.
        Lots of questions here - what if someone transfers a virtual currency from one wallet to another? What if there was a hard fork during the year that the taxpayer doesn't learn about until much later (which the IRS views as received once recorded on the distributed ledger (per Rev. Rul. 2019-24))?  What is an individual's partnership owns some and the partner doesn't know? What if you received some by gift and held onto it? Likely a good idea to attach a statement explaining why you check "yes" but don't have any virtual currency transaction noted on the return such as because  you received some by gift and held onto it rather than disposed of it.
        And just what does the IRS view as "virtual currency"? Between early October 2019 and February 12, 2020 the IRS broadly defined virtual currency to also include some gaming currency such as Roblox and V-bucks (click here for 10/12/19 version from the Wayback Machine).  After some attention on social media such as parents wondering if they need to answer "yes" because of gaming activities of their children, the IRS issued a "statement" on Feb 14, 2020 and changed the language on its Virtual Currency website. Per the statement, using virtual currency in a game that never leaves the game (not convertible) doesn't warrant a "yes" answer. But, some of the game currency does leave the game environment, so taxpayers need to check. See my blog post of 2/15/20 for issues I think exist with this broad definition and losing site of tax considerations. Also sounds like the IRS needs to say more as given their still broad definition of virtual currency, perhaps some gift cards or merchant point systems are a convertible virtual currency.
  • IRS CC 2020-003, Procedures for Coordination of Cases Involving Virtual Currency (10/22/19) - information for IRS attorneys working cases involving virtual currency and digital assets
  • Notice 2014-21 (3/25/14)
  • FinCEN and FBAR reporting - see Kirk Phillips, "Virtual currency not FBAR reportable (at 
    least for now)
    ," Journal of Accountancy, 6/19/19
  • IRS started sending letter to virtual currency owners to check their filings, IR-2019-132 (7/26/19)
  • IRS reminders on virtual currency reporting, IR-2018-18 (3/23/18)
  • IRS LB&I adds virtual currency as an examination campaign (7/2/18)
  • 21 members of Congress ask Comm's Rettig for more guidance (4/11/19)
    • Commissioner Rettig says more guidance is on its way (5/16/19)
  • Congressman Brady calls on IRS to issue more guidance (Sept. 2018)
  • IRS Webinar - Understanding the Basics of Virtual Currency (2018)
  • Kimmelman v Wayne Insurance Group, No. 18 CV 1041 (Ohio Ct Common pleas, 9/25/18) - K's filed claim for stolen bitcoin and insurance company awarded $200 for stolen cash claim. Court agreed with K's argument that it is property as labelled by the IRS in Notice 2014-21.
  • J5 - Global Tax Enforcement - On 7/2/18, the Joint Chiefs of the Global Tax Enforcement  announced a joint effort to "combat international tax crime and money laundering." This effort includes "fighting ... cybercrime through the use of cryptocurrencies." The J5 consists of criminal investigation units from Australia, Canada, Netherlands, UK and the U.S.
  • IRSAC Report of Nov. 2018 includes recommendations on virtual currency and IRS
  • IRS National Taxpayer Advocate's 2013 Annual Report to Congress - Most Serious Problem #24 -The IRS Should Issue Guidance to Assist Users of Digital Currency (pages 249 - 255)
  • GAO, Virtual Economies and Currencies: Additional IRS Guidance Could Reduce Tax Compliance Risks (5/15/13)
  • OECD, BEPS Action 1, March 2014, see pages 15 - 16
  • IMF, Virtual Currencies and Beyond: Initial Considerations, Jan. 2016 + press release (1/20/16)
  • TIGTA press release (11/8/16) and report (9/21/16) pointing out that the IRS is not using its enforcement tools to "address virtual currency tax noncompliance." TIGTA also points out that while the IRS sought comments on where additional guidance needed (per Notice 2014-21), it has not issued any additional guidance.
  • Court denies motion to quash IRS summons - Zietzke,  No. C19-1234-JCC (WD WA, 11/25/19); summons issued to Bitstamp and a user challenged it. Court did find that it was overly broad but otherwise valid.
  • IRS John Doe Summons – U.S. v. John Doe,  No. 3:16-cv-06658-JSC (ND CA 11/30/16) – The IRS filed a petition to obtain two years of records from Coinbase (2014 and 2015). The 16-page petition (11/17/16) explains how virtual currency works and what Coinbase does. It also provides an example the IRS Revenue Agent found that involved moving millions of virtual currency. The IRS believes that some of its customers have not complied with the tax laws. See Stan Higgins, “The IRS is Seeking Data on Coinbase’s Bitcoin Customers,” CoinDesk, 11/18/16. See 11/30/16 Dept. of Justice press release on the court's grant of permission to the IRS to serve the summons + 11/17/17 court order. In March 2017, the Department of Justice filed a petition asking Coinbase to show cause for not producing the records (also see No. 3:17-cv-01431-JSC (ND CA, 3/16/17)). This petition lays out concerns of the IRS including that in 2013 and 2014, it looks like only about 800-900 individual returns reported any gain or loss from bitcoin transactions. On 5/17/17, Senator Hatch and Congressman Brady sent a letter to the IRS questioning the scope and basis for the summons as it seems overly broad in asking for records of over 500,000 active users of Coinbase. On 7/18/19, the District Court granted Doe #4 the right to intervene upon showing that the IRS summons was broad in that the IRS likely doesn't need all records of the million+ Coinbase users (also see 7/25/17 blog post of Procedurally Taxing). Per a July 6, 2017 filing, the IRS agreed to only look at "accounts with at least the equivalent of $20,000 in any one transaction type (buy, sell, send, or receive) in any one year during the 2013-15 period." Also see Coin Center's 8/3/17 amicus brief arguing that the IRS summons is too broad.  On 11/28/17, the final decision was issued by the court to require Coinbase to produce documents for accounts with at least the equivalent of $20,000 in any one transaction type (buy, sell, send, or receive) in any one year during the 2013 to 2015 period (Case 3:17-cv-01431-JSC) . Also see Feb. 2018 information from Coinbase to its customers.


Additional Resources on Tax Considerations

​​HOME                       Copyright © 21st Century Taxation. All rights reserved.

This webpage is intended to provide information and links about taxation of virtual currencies (aka cryptocurrency) in the U.S. and elsewhere, and related information, including about blockchain (aka distributed ledger technology). Please scroll through to see topics and links.


U.S. Income Taxation

In March 2014, the IRS issued Notice 2014-21 and Information Release IR-2014-36, on the income tax treatment of virtual, convertible currency, such as bitcoin. The IRS has ruled that virtual currency is treated as property, rather than currency for tax purposes. That means it needs to be valued when used (such as to buy goods or to compensate an employee or to acquire a different virtual currency) to determine tax consequences. For example, assume Jane purchased X bitcoins last year for $100. Today, she uses that X bitcoin amount to buy clothes worth $120. Jane has a $20 gain on this transaction. Assuming she is an investor or trader in bitcoin (rather than a dealer), this is a capital gain which is taxed at a lower rate for federal income tax purposes than other income such as wages (assuming it is a long-term gain). Jane must keep records to track the basis of all virtual currencies she purchases and identify which ones she uses when she buys something. Basically, Jane is bartering.  For more on the tax rules and issues, exchange rates, and other information, see the links below.

21st Century Taxation blog posts and presentations with links to information about taxation of virtual currencies 


21st Century Taxation

Tax Reform - Modernizing Tax Systems,      Following Principles of Good Tax Policy ​

Exchange Rate Information 

These are samples, not an exhaustive list.

Taxation and Regulation in Other Countries - Virtual Currencies, ICOs
Please note - this is not a complete list

U.S. Treasury FinCEN and Related Information

​The Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department has issued guidance on banking and other aspects of virtual currency.

CFTC holds that bitcoins are a commodity (9/17/15 ruling)

Remarks From Under Secretary of Terrorism and Financial Intelligence David S. Cohen on "Addressing the Illicit Finance Risks of Virtual Currency" 3/18/14


Articles and Information about Virtual Currencies & Blockchain Technology