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Cryptocurrency Tax on Token Creators Fought in New Lawsuit (1)

May 26, 2021, 2:15 PMUpdated: May 26, 2021, 7:55 PM

Newly created cryptocurrency tokens can’t be taxed as income because federal income tax laws don’t permit taxing people simply because they create new property, according to a lawsuit.

Joshua and Jessica Jarrett’s complaint, filed Wednesday in the U.S. District Court for the Middle District of Tennessee, asks for just $3,793 in a tax refund, plus interest. But the issue at stake could affect a wide array of cryptocurrency owners at a time when tax authorities are stepping up their cryptocurrency enforcement efforts.

“If the principle gets enshrined into law that newly created property is income, who knows where ...

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