IRS Fell Short of Taxing Bitcoin, Ethereum Splits, CPAs Say

Recent IRS guidance may not apply to the Ethereum or Bitcoin chain splits that occurred in 2016 and 2017—even though they appear to be the agency’s intended targets, a national CPA organization said.

“The current ruling, as written, does not technically apply to those cryptocurrency events,” the American Institute of CPAs said in a Feb. 28 letter to the IRS.

• The agency’s revenue ruling, released in October, says that cryptocurrency users are required to pay income tax on new coins distributed in an “airdrop” following a transaction known as a “hard fork.” A hard fork occurs when there’s change ...