The last word taxpayers engaging in virtual currency transactions heard from the IRS was in 2014 in Notice 2014-21. Please review our commentary on the notice here. Now, five years later, the IRS has issued two new pieces of guidance for taxpayers in this area in the form of Revenue Ruling 2019-24 and a set of questions and answers on the subject. The Ruling itself centers on issues involving the hard fork, i.e. when a cryptocurrency on a distributed ledger undergoes a protocol change resulting in a permanent diversion from the legacy or existing distributed ledger. The IRS question and answer link supplements issues addressed in Notice 2014-21. Taxpayers involved in any virtual currency transactions should contact us for advice in connection with these two important pronouncements.
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