IRS Issues New Guidance On Cryptocurrencies For The First Time In Four Years

On October 9, 2019, IRS released Revenue Ruling 2019-24, 2019-44 IRB 1,¹ which provides new guidance on the Service's handling of cryptocurrencies and is the first of such guidance to be released since March 2014 when IRS issued Notice 2014-21.² The ruling was issued after prodding from a bipartisan congressional coalition.³ The ruling, and attached Frequently Asked Questions ("FAQs"),⁴ address three issues identified by members of Congress as being in "urgent need" of IRS clarification:⁵ (i) provide some clarity as to IRS' taxation of cryptocurrency forks and detail methods for (ii) calculating and (iii) assigning cost basis. When announcing the revenue ruling's release, IRS Commissioner Chuck Rettig stated that "IRS is committed to helping taxpayers understand their tax obligations in this emerging area," and that "the new guidance will help taxpayers and tax professionals better understand how longstanding tax principles apply in this rapidly changing environment."⁶