Members of Congress Respond to IRS Tax Guidance for Digital Assets
On December 20, eight members of the U.S. House of Representatives sent a letter to the Commissioner of the Internal Revenue Service (“IRS”) urging further clarity on positions expressed in the IRS’s October tax guidance for digital assets.
The letter described various ways in which the October guidance raised additional questions about the taxation of digital assets, specifically identifying the issue of airdropped or forked digital assets as an area of immediate concern. The authors expressed concern that ambiguity regarding airdrops and forks may result in unanticipated tax obligations for owners of digital assets who become owners of additional digital assets as a result of a fork or airdrop. According to the authors, this outcome would be inconsistent with the IRS’s previous interpretations regarding unsolicited prizes or samples. Continue Reading