Tax Reporting of Cryptocurrency and Current Enforcement Trends

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, January 19, 2023

Recorded event now available

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Course Materials

This course will provide tax advisers and tax compliance professionals with a practical look at IRS guidance on calculating and reporting gain on cryptocurrency-related transactions as well as current trends in tax reporting and enforcement.

Description

The IRS has issued minimal guidance on the tax consequences associated with transactions in cryptocurrency, including non-fungible tokens, smart contracts and DeFi lending. Nevertheless, the IRS continues to press its concern over massive under-reporting of income from cryptocurrency-denominated transactions. In this regard, the IRS is using data analytics and artificial intelligence to make use of information gained from John Doe summonses issued to various virtual currency exchanges to increase civil and criminal tax enforcement regarding cryptocurrency-related transactions. It is against this background that tax advisers must understand the tax rules applicable to cryptocurrency transactions as well as best practices to protect against civil and criminal tax penalties where the tax laws are uncertain. 

Listen as our expert panelists provides practical guidance on the U.S. tax reporting and payment duties arising from cryptocurrency transactions as well as best tips for navigating the IRS and U.S. Department of Justice’s enforcement efforts.

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Outline

  1. Introduction to types of cryptocurrency
  2. A Survey of the Current Tax Authorities Applicable to Cryptocurrency Transactions and Navigating Areas of Uncertainty
    1. Challenges in determining valuation and calculating basis for virtual currency holdings
    2. Income recognition
    3. Deductions for Worthless Cryptocurrency
    4. Tax reporting requirements for cryptocurrency transactions
    5. Taxation of staking and mining
  3. Proposed legislation and regulatory developments affecting cryptocurrency
  4. Reporting payments in cryptocurrency to employees, contractors, and other parties
  5. Current Trends in Civil and Criminal Tax Enforcement
  6. Remedies to voluntarily correct noncompliance

Benefits

The panel will review these and other relevant issues:

  • Limitations on loss recognition on cryptocurrency transactions and exchanges
  • Income tax reporting requirements for cryptocurrency exchanges and valuations
  • The impact of recent tax legislation on the tax treatment and reporting of cryptocurrency-denominated transactions
  • Challenges in determining the basis of cryptocurrency

Faculty

Polizzano, Brad
Brad Polizzano, J.D., LL.M.
Senior Manager
Baker Tilly US

Mr. Polizzano provides tax consulting and compliance services to private equity and other privately held companies,...  |  Read More

Rager, Matthew
Matthew (Matt) Rager, CPA

Director, Tax
Cohen & Company

Mr. Rager helps both individuals and companies in the investment industry navigate complex tax issues daily. Clients...  |  Read More

Sannicandro, Lawrence
Lawrence A. Sannicandro

Partner
McCarter & English

Mr. Sannicandro focuses his practice on federal and state tax controversies, including representation in audits,...  |  Read More

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