The Peck Group, LC
  • Comprehensive Tax Law Representation Since 1995

    We handle every aspect of tax law: preparing tax returns, representing clients during audits, resolving IRS and state tax controversies, and creating tax planning strategies for the future.

  • Problems With The IRS Or State Tax

    Our attorneys are committed to providing efficient and effective tax solutions for individuals and businesses in Georgia and nationwide.

  • Planning For The Future

    Our lawyers help individuals and businesses with all aspects of estate and tax planning. We help our clients use proactive strategies to minimize tax implications in the future

  • Changing The Balance Of Power

    Does it feel like the government has all the power? Taxpayers have rights, too. We use our knowledge of tax law to shift the balance of power and ensure that your rights are protected.

  • Tax Solutions … And Peace Of Mind

For Bitcoin investors, more guidance needed from IRS

Many of our readers have probably heard of Bitcoin and other forms of cryptocurrency such as Litecoin and Ethereum. For those who haven't heard of it, Bitcoin is a form of digital payment system in which transactions take place directly between users of the currency. Bitcoin is currently a very popular investment, currently boasting a 353 percent year-to-date return.  

While those who have been investing in Bitcoin in the last handful of years have received a good return on their investment, tax authorities are well aware that many individuals are failing to report their Bitcoin profits as income. In fact, some experts estimate that the IRS may be looking to collect several billions of dollars in back taxes, as well as interest and penalties, from those who failed to report Bitcoin income, though others feel the problem is not so extensive. 

There are a couple reasons why Bitcoin investors may not be reporting income. First of all, users don't receive tax forms for Bitcoin, leading investors to believe they may not have to report. That isn't true, of course. All income must be reported. A second reason for failing to report Bitcoin users may believe they cannot be identified by authorities because their identity is concealed in Bitcoin transactions. This isn't completely true, though. While users' real identities are not displayed in transactions, authorities can still use forensic analysis to identify users through their transactions.

A third reason for the failure to report is that Bitcoin is still relatively unregulated. The IRS considers virtual currency to be property rather than true currency or securities, and this allows users to avoid rules pertaining to securities and to take advantage of tax benefits applying to property. The IRS has yet to offer Bitcoin users guidance.

Those who own Bitcoin or other forms of cryptocurrency can and should consult an experienced attorney to address the payment of back taxes associated with Bitcoin. Those who are considering or who are considering investing in Bitcoin can also work with an experienced attorney to determine in advance their obligations to the IRS in terms of reporting income and losses. Being proactive can help ensure one doesn't end up in a spot down the road where the IRS catches one by surprise. 

No Comments

Leave a comment
Comment Information
Email us for a Response

Talk to an Attorney

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

The Peck Group, LC
5855 Sandy Springs Circle N.E., Suite 190
Atlanta, GA 30328

Phone: 770-884-6914
Fax: 770-933-2369
Atlanta Law Office Map

Payment Cards