Bloomberg Tax
Oct. 30, 2019, 8:46 AM

Unwanted Cryptocurrency Could Trigger Tax Under IRS Policy

Allyson Versprille
Allyson Versprille

Cryptocurrency holders could have to pay tax on coins they received unwittingly, or against their wishes, under recent IRS guidance.

If left unchanged, the policy may make it harder for people to meet their tax obligations—at a time when the IRS is ramping up enforcement to increase compliance in the crypto space, according to tax professionals.

The revenue ruling released Oct. 9 says users are required to pay income tax on new coins they receive following a transaction known as a “hard fork,” during which one cryptocurrency splits into two.

The IRS generally defines this distribution of new ...

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