The primary professional organization for accounting professionals (AICPA) recently renewed their requests to the Internal Revenue Service for U.S. virtual currency guidance on key tax issues. The IRS has not shown any willingness to publish more advice in this area, so a response to the letter may not be forthcoming. The IRS has ignored the AICPA’s previous letter for 2 years now. That said, it provides thoughtful commentary, and recommendations for frequently asked questions, covering key topic areas including, among others:

  • Deductions for mining expenses
  • Acceptable valuation and documentation
  • Computation of gains and losses
  • Valuation for charitable contributions
  • Taxable and non-taxable events
  • Traders and dealers of virtual currency
  • Holding virtual currency in retirement accounts
  • Foreign reporting of virtual currency

Thus far, tax professionals have been forced to work from limited IRS guidance (Notice 2014-21), and informal public statements from government officials. The AICPA letter provides thoughtful ideas that reflect positions common among tax professionals. Their recent letter also reiterates a direct request from the ABA’s Tax Section for guidance on chain splits/hard forks (see American Bar Association Letter from March 2018).