Document Type
Article
Language
eng
Publication Date
1-2018
Publisher
Tax Analysts
Source Publication
Tax Notes
Source ISSN
0270-5494
Abstract
In this report, the authors discuss cryptocurrencies — especially bitcoin — and argue that because the IRS lists them as property, they are taxable, and because they are not as anonymous as once thought, they are not free from fraud.
Cryptocurrencies are digital assets used as a medium of exchange, but they are not really coins. They can be sent electronically from one entity to another almost anywhere in the world with an internet connection. There are many cryptocurrencies in the market, including bitcoin, ethereum, ethereum classic, litecoin, nem, dash, iota, bitshares, monero, neo, and ripple. Many of the cryptocurrency networks are not controlled by a single entity or company; instead, a decentralized network of computers keeps track of the currency using a token ID. A ledger maintains a continuously growing list of date stamped transactions in real time called “blocks.” This technology is known as blockchain, which records, verifies, and stores transactions without a trusted central authority. The network instead relies on decentralized autonomous organizations (DAOs) with uncertain legal standing.
Recommended Citation
Wall, Joseph; Crumbley, D. Larry; Kilbourne, Lewis B.; and Blair, Caleb, "Cryptocurrencies Are Taxable and Not Free From Fraud" (2018). Accounting Faculty Research and Publications. 113.
https://epublications.marquette.edu/account_fac/113
Comments
Published version. Tax Notes, (January 2018). Published version. © 2018 Tax Analysts. Used with permission.