Mr. Cope monitors the development of U.S. tax law daily through postings on government websites, daily tax publications, monthly tax journals, tax newsletters, tax conferences and meetings of professionals organizations in New York and Washington. Each month he publishes the Tax Insights Blog, which describes and analyzes significant U.S. tax developments (e.g., judicial decisions, regulations, proposed tax legislation) having cross-border tax consequences. The blog's content should be of interest to U.S. businesses with foreign operations and businesses headquarted outside the United States with U.S. investments or U.S. operations.
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IRS Provides Guidance on Taxation of Transaction Involving Virtual Currencies
Last year the General Accounting Office of the U.S. government recommending that the IRS provide additional guidance on tax issues raised by the use of virtual currencies in the real economy. On March 25, 2014, the IRS responded to that request with Notice 2014-21, which outlines general tax principles applicable to the taxation of transactions involving virtual currencies.
GAO Recommends IRS Issue Guidance on Taxation of Virtual Currencies
In May 2013, the U.S. Government Accountability Office (the “GAO”) issued a report to the Senate Finance Committee (the “Report”) recommending that the IRS provided additional guidance on the tax issues raised by virtual economies and currencies. The Report was released to the public in June 2013, after the IRS was given the opportunity to review the Report and respond to its findings. As discussed below, the Report is significant because it focuses attention on the growth of virtual economies and virtual currencies and tax issues raised by each.