Using Unrelated IRS Guidance as a Framework for Taxing Crypto Transactions: Revenue Procedure 2019-18

Abstract

The cryptocurrency market has become one of the fastest growing industries in the world, with a market capitalization exceeding $2 trillion. This rapid growth has caused strains on financial systems, as well as the Internal Revenue Service. With cryptocurrency technology developing faster by the week, a unified and simplified regulatory approach is the sensible roadmap for the Internal Revenue Service in its task to impose federal income tax. This paper proposes that by researching prior IRS guidance on unrelated issues and using preexisting precedent, specifically, Revenue Procedure 2019-18, the Internal Revenue Service can more simply impose federal income taxes on the ever-changing cryptocurrency space. JEL Classifications: K23; K29; K34.

Cryptocurrencies’ Impact on Accounting: Bibliometric Review

“…The tax treatment of cryptocurrency exchanges also presents challenges (Cong et al 2023;Nylen and Huels 2022). Several authors, including Bellucci et al (2022) and Volosovych and Baraniuk (2018), recommend treating these exchanges similarly to foreign currency transactions.…”