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Weekend Insights: Blockchain Basics and Cryptocurrency Compliance



It is important to understand the tax ramifications of cryptocurrency and blockchain. From cryptocurrency compliance to NFT, we’ll tell you what you need to know in this week’s Insights Roundup.

But first, some background information. In 2014, I followed a story about an alleged online black market called Silk Road, where buyers and sellers did all bitcoin transactions. It was my first time hearing about cryptocurrency and I was intrigued when agents from IRS Criminal Investigation explained it to me.

These days, you can’t pick up a newspaper or click on a website without hearing a hint about cryptocurrency and blockchain. The market cap for cryptocurrency is reportedly over $ 1.7 trillion, with Bitcoin being the most valuable.

The embossed word Bitcoin is on the edge of the bitcoins stacked in this arranged photo in Danbury, UK

Photographer: Chris Ratcliffe / Bloomberg via Getty Images

Bitcoin is a digital currency, which means that instead of a coin that you can hold in your hand, it is essentially a computer file. You can store it in your digital wallet on your computer to use to purchase goods or services, or exchange it for other digital currencies or cash through a platform. What makes it so attractive is that each of these transactions is stored on the blockchain.

Think of blockchain like a general ledger: this is something those of us in the tax and accounting world are familiar with. Instead of recording your general ledger positions with blockchain on a paper or computer spreadsheet, you store information or data in blocks. This data contains the time and order of the transactions – just like your manual ledger entries.

When these blocks are filled, they do not disappear: they are appended to a new block and form a chain. The entire sequence is called a blockchain. Thanks to the technology, the chains are irrevocably linked, so you cannot simply delete or change them.

When you buy or trade bitcoin on its blockchain, that transaction is recorded. And since Bitcoin’s blockchain is decentralized, other users can watch transactions take place. When a transaction takes place, every computer on the network records the change. This transparency is part of the appeal.

But don’t confuse transparency with making your information public. Users can see the transactions, but they cannot necessarily identify the people who are making the transactions. This is because you are using a code called a public key to record the transactions on the blockchain, and not your name or other personal information.

The complexity of the blockchain – and the speed at which transactions can be conducted without a middleman – has made it difficult to determine the tax consequences. The IRS didn’t even offer taxpayers any guidance on how to treat bitcoin – and other virtual currencies – for federal income tax purposes until 2014. The IRS eventually weighed that bitcoin and other cryptocurrencies were considered capital assets.

Now, more and more industries are watching how Bitcoin uses blockchain and are considering how this technology could be used outside of digital currency. We are already seeing this with non-fungible tokens or NFTs. That adds another level of complexity.

What does this mean for tax professionals? Of course, there is a lot to consider, from tax compliance strategies to tax planning.

Quick Numbers Trivia

Currencies are usually divisible into smaller units. For example, dollars can be broken down into quarters, dimes, nickels, and pennies, with pennies being the smallest. What is the smallest Bitcoin unit called?
(Answer below.)

Our summary

In this photo illustration of the cryptocurrency “Altcoins” from Litecoin, Ripple and Ethereum, a photo is arranged on April 25, 2018 in London, England.

Photo by Jack Taylor / Getty Images

The IRS has made no secret of its belief that taxpayers are improperly reporting cryptocurrency transactions. Now if you include a question about cryptocurrency transactions at the top of Form 1040, it means that this is a compliance priority for the IRS. David Zaslowsky and Scott Frewing of Baker McKenzie examined the different ways various U.S. government agencies define cryptocurrency and the IRS’s efforts to increase the revenue stream for cryptocurrency transactions to the government – Part 1. In Part 2, the authors look at others Enforcement efforts by the IRS as well as reporting and withholding tax obligations that may come to the fore due to previous enforcement activities of the IRS.

  • Further information on the frequently asked questions about cryptocurrency by the IRS, the Common Reporting Standard and compliance with cryptocurrency can be found here in this Taxgirl podcast episode. Wendy Walker, Solutions Director at Sovos Compliance, shares what you need to know.

Thanks to blockchain, NFTs are the “next big thing”. But just because NFTs are new doesn’t mean the IRS is not paying attention. In How Are Non-Fungible Tokens (NFTs) Taxed? Describes CoinTracker’s Shehan Chandrasekera how NFTs are taxed, what records must be kept, and what forms must be submitted.

Cryptocurrency isn’t the only control that tax professionals scratch their heads these days. The Biden government has proposed changes to both the estate tax rate and tax exemption – and that raises some questions about what to do next. In Estate Planning for Proposed Tax Changes: Privately Held Company Valuation Guidelines, Mark Zyla of Zyla Valuation Advisors LLC explains what privately held company owners need to know in order to transfer those companies to their heirs and minimize the value of the interest transferred for tax purposes.

  • For more information on wealth planning considerations, see the Biden proposal in this episode of Talking Tax. Bloomberg tax reporter Allyson Versprille speaks to Brad Dillon, a senior wealth strategist at UBS Group AG in New York City, about what the plan could mean for real estate.

When we think about how we can improve businesses, improving technology shouldn’t be the only goal. Derrick Coleman of Creative Financial Staffing, a subsidiary of GHJ, writes that companies should approach diversity with the same mindset in order to find efficiency gains or new target markets. Having a diverse workforce, including the C-Suite, is good for both culture and bottom line, he says, explaining how you can achieve this by developing and maintaining various hiring practices after the pandemic.

Write for us

Bloomberg Tax Insights articles are written by tax professionals who provide expert analysis of current tax practice and policy, tax trends and issues, and the practice and management of tax and accounting firms. If you have an interesting, never-published article to publish, we’d love to hear about it. You can contact our Insights team by emailing

Beyond taxes

One of the dangers of collecting data – in a table or on the blockchain – is whether collecting and keeping the data is allowed. Employers may want to collect information about the diversity of applicants and employees for follow-up purposes. However, these efforts are grounds for potential data breach-related litigation and discrimination claims outside of the United States. Faegre Drinker’s attorneys Erika C. Collins and Ryan H. Hutzler investigate pitfalls for US companies collecting diversity data overseas.


This week’s main focus is on Jessalyn Dean, an American who has lived and worked in the US, Australia, India, Ireland and now the Netherlands. She is a tax advisor who helps companies interpret, implement and automate tax transparency regulations – also known as business taxes – such as 1099/1042-S, QI, FATCA, CRS and DAC6. You can find out more about Jessalyn – and how to make a nomination – in our first part of the series.

Student writing contest

Think you have what it takes to write Bloomberg Tax Insights? We’re excited to have our first Bloomberg Tax Insights writing competition designed to highlight the best of student writing.

Run with us

Ready to blow off some steam after a long (long) tax season? Bloomberg Tax challenges you to a virtual 5k. Run as fast as you want – or take a walk to soak in the fresh air – and earn a cool medal. And since #TaxTwitter loves their waffles, pancakes and other breakfast foods, we keep paying them by donating the proceeds to World Central Kitchen to help fight hunger. Here you can sign up.

Fast response to numbers

It’s called Satoshi. And 100,000,000 satoshi = 1 BTC. This currently means 1 satoshi = 0.0003871248 USD or vice versa 1 USD = 2,585 satoshi.

Satoshi was named after the Bitcoin founder Satoshi Nakamoto.

A neon sign reads “We are Satoshi Nakamoto,” a reference to the unknown creator of Bitcoin at the entrance to Foxbit International’s office in Sao Paulo, Brazil.

Photographer: Patricia Monteiro / Bloomberg via Getty Images

Exclusive content for Bloomberg Tax subscribers

With the IRS making cryptocurrency a priority, tax professionals need to know how to respond on behalf of their clients. Our IRS Response Letter for Letter 6174 – Reporting Virtual Currency Transactions can point you in the right direction. Here is a reply letter along with sample IRS letters (Letter 6173, Letter 6174, and Letter 6174-A) and other resources and links for analysis.
* Note: Your Bloomberg Tax login is required to read IRS Response Letters, Letter 6174 – Reporting Virtual Currency Transactions.

More great tax content

This is a practitioner-authored weekend round-up from Bloomberg Tax Insights that includes expert analysis of current tax practice and policy issues. For a full archive of articles, see Daily Tax Report, Daily Tax Report: State, Daily Tax Report: International, Transfer Pricing Report, and General Ledger by Jurisdiction.

You can also follow Bloomberg Tax on Twitter, Facebook, and LinkedIn.

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We hope you enjoy the new format – and the new look and feel – of Weekend Insights. We’d love to hear what you think. Here is our email:

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Voyager Digital Becomes the Official Cryptocurrency Brokerage Partner of the Dallas Mavericks



Voyager is the first international partner of the Dallas Mavericks to join forces to make crypto more accessible to all

Frankfurt Scholarships: UCD2

NEW YORK, October 27, 2021 / PRNewswire / – Voyager Digital Ltd. (“Voyager” or the “Company”) (TSX: VOYG) (OTCQX: VYGVF) (FRA: UCD2), one of the fastest growing publicly traded cryptocurrency platforms in the The United States, has entered into a five-year exclusive, integrated partnership with the Dallas Mavericks to become the team’s first cryptocurrency broker and international partner. A press conference will take place in Dallas today at 4:00 p.m. Central Time discuss the partnership. To view, please visit:

Voyager and the Dallas Mavericks will work to make cryptocurrencies more accessible through education and community programs, global activations, and fan engagement drives. The partnership also includes the naming rights to the Mavs Gaming Hub, the official game and event location of the Mavs NBA 2K League team and will be announced at a later date.

This partnership makes Voyager the first international partner of the Dallas Mavericks and enables both parties to reach a wider, global audience to increase brand awareness and drive the adoption of cryptocurrencies around the world. In 2019, the NBA gave the teams the opportunity to grant international sponsorship rights outside of them The United States and Canada.

“The Mavs are proud to welcome Voyager to the Dallas Mavericks family,” said the governor of Mavs Mark Cuban. “Crypto assets and applications are changing the way business and personal finances are handled. We believe our partnership with Voyager will enable MAVs and NBA fans to learn more about Voyager and how they can earn more with the Voyagers platform than with traditional financial applications. ”

“We couldn’t be more excited to be working with the Dallas Mavericks to make crypto more accessible to everyone,” said Steve Honest, CEO and Co-Founder of Voyager. “This partnership gives us the opportunity to educate people around the world about the use of crypto in their daily lives. We want to help people learn alternative ways to grow their wealth, gain real financial freedom, and build cross-generational wealth through crypto. We found a great partner to do this with the Mavs and their owner, Mark Cubanwho is already deeply involved in the room. ”

About Voyager Digital Ltd.
Voyager Digital Ltd. (TSX: VOYG) (OTCQX: VYGVF) (FRA: UCD2) is a fast growing, publicly traded cryptocurrency platform in The United States was founded in 2018 to provide the market with choice, transparency and cost efficiency. Voyager offers a secure way to trade over 60 different crypto assets with its user-friendly mobile application and earn rewards of up to 12 percent annually for more than 30 cryptocurrencies. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the world. To learn more about the company, please visit

About the Dallas Mavericks
The Dallas Mavericks are a premier global sports and entertainment organization that delivers unforgettable experiences to fans around the world. The Mavs compete as a member of the Western Conference in the National Basketball Association and play at the American Airlines Center under the direction of Coach Jason Kidd, Chief Executive Officer Nico Harrison, CEO Formerly Marshall and governor Mark Cuban. Since the inaugural 1980-81 season, the Mavs have won four division titles, two conference championships, and one NBA championship in 2011 North Texas through community programs and the Mavs Foundation. For more information on the Dallas Mavericks players, staff, stats and tickets, visit

The TSX has neither approved nor disapproved of the information contained herein.

Press contacts

Voyager Digital Ltd.
Michael Legg
Chief Communications Officer
(212) 547-8807
[email protected]

Voyager PR team
[email protected]

Dallas Mavericks
Erin Feingold White
SVP, corporate communications
(214) 415-9183
[email protected]

SOURCE Voyager Digital (Canada) GmbH.

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How Ethereum Steadily Holds Their Second Place For Years



In the past few years, Ethereum has been one of the most stable coins on the market. From December 2016 to December 2017, less than a year, the value of Ethereum rose from around $ 8 to over $ 1,000. However, this sudden surge is not because it is a new coin that no one knows about; Rather, its popularity is based on how easy it is to program smart contracts on its blockchain. The system was developed by Vitalik Buterin, who viewed Bitcoin as an inefficient and expensive solution for payments and wanted something better.

Ethereum has been the second most stable coin for years. It wasn’t until early 2017 that XRP (Ripple) briefly overtook Ethereum to take its place before coming back, but it hasn’t left second place since then. It is currently valued at around $ 4,200 per coin and has a market cap of over $ 400 billion.

The reason it was built in the first place

Vitalik Buterin, a Russian-born Canadian programmer, founded Ethereum to create a platform where smart contracts can be easily created and executed by anyone in the world. His idea was to use a programming language that programmers would be familiar with and make programming easier for them. He also wanted to add other features like Turing completeness (the ability to execute an infinite number of commands depending on the length of the contract) and ensure that programmers don’t have access to each other’s information.

The Ethereum network allows developers to create decentralized applications called “dapps”.

Dapps is a decentralized version of an application. With traditional applications, all information is stored on a central computer and can be accessed by users from their computers.

In decentralized applications, all information is decentralized and each user can make their own copy of the application, which is updated as new information comes in. This means that if a developer creates a decentralized version of Twitter, every time a tweet is posted, all users who have downloaded the application will be updated accordingly.

Dapps can be used for a variety of purposes such as gambling, social media platforms, or even financial services.

It is also possible to create a new type of token with an Erc-20 standard on Ethereum

ERC-20 is a set of rules that all Ethereum tokens must follow in order to be compatible with each other. This enables developers to create new tokens on the same blockchain without having to recreate many of the functionalities already present in Ether.

Ethereum also has its Solidity programming language. This makes Ethereum more flexible than other cryptocurrencies due to its Turing completeness (ability to execute an infinite number of commands depending on the length of the contract).

This standard has led to the creation of ICOs (Initial Coin Offerings) that help startups raise funds for their projects. ICOs are a way to fund new cryptocurrencies through crowdfunding by allowing anyone to buy tokens offered by the company. This allows users to use these tokens within certain platforms or services, creating demand when more people are using them and adding value when they are more difficult to acquire.

How Ethereum is used in some industries

The betting industry is one of the industries that can benefit the most from Ethereum’s blockchain. This is because betting involves a lot of different steps that must be carried out quickly and efficiently. All of these actions (checking that users have enough money, executing commands, upgrading game credits, etc.) require some sort of verification process that must be performed from an external computer.

With Ethereum, all the actions that a betting company has to carry out can be programmed into a smart contract that does not require any verification by external computers and also does not have to be limited to a sequence of commands. This means betting companies no longer have to pay anyone to monitor their betting platform, and it also enables better transparency and betting in a trusted environment.

More and more betting platforms are using Ethereum as a payment method. The value of the coin and its submerged market capitalization are good reasons for the betting platform to use this currency just like Bitcoin. Soon we will see unbreakable relationships from Ethereum betting sites.

The recipe behind the steady success of Ethereum

One of the reasons for the steady growth of the aether is its simplicity. Ethereum’s blockchain can be compared to a web browser. Each user has their own copy of the entire blockchain to access Dapps and use them at any time.

When a user updates the Ethereum blockchain, their copy is also updated and automatically synced with all copies of all other users. This means that any new information added to a Dapp is instantly updated on every single copy of the blockchain.

This created a network in which each user can create their own “server” or “node”. As more users can connect to the network, it also becomes more difficult to shut down or destroy.

Ethereum has become one of the few coins that has a resilient value on the market. Even if the price goes down, it still has a high market cap, which makes it one of the most valuable coins around.

Another reason that makes Ethereum so versatile is that anyone can create their own coin on the Ethereum blockchain. Instead of creating an alternative coin or a new protocol, it’s easier to build new dapps on Ethereum, which also increases the demand and price.

This has created one of the largest industries in the world that anyone can invest in without having to go to middlemen.

The future of Ethereum

Ethereum has been one of the most stable coins on the market for years. Ethereum was developed by Vitalik Buterin, who viewed Bitcoin as an inefficient and expensive solution for payments and wanted something better. The system enables developers to create decentralized applications called “dapps” that can be used for various purposes such as gambling or social media platforms. It is also possible to create a new type of token with an ERC-20 standard on Ethereum, which has become popular with other cryptocurrencies and ICOs. In 2016 there were over 1 million active addresses of users who participated in transactions on the blockchain, which shows how this technology will continue to grow in the future.

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Miami-Dade County Cryptocurrency Task Force and American CryptoFed DAO Thank Wyoming’s Cryptocurrency and Blockchain Leaders for Educational Discussions



Released: Oct 26, 2021 at 6:00 p.m. HST|Updated: 2 hours ago

CHEYENNE, Wy., Oct 26, 2021 / PRNewswire / – The Miami-Dade County Board of County Commissioners’ adoption of Resolution R-455-21 provides for the creation of a Cryptocurrency Task Force to review the feasibility of Miami-Dade County Accepting cryptocurrency and other forms of digital money as acceptable methods of payment for the county’s taxes, fees, and services, and making recommendations for other cryptocurrency policy initiatives that would be beneficial to Miami-Dade County. In order to accomplish the mission, as required by the same Resolution R-455-21, to review and analyze the efforts of other local, state, or national governments regarding cryptocurrencies, Chairman of the Miami-Dade Cryptocurrency Task Force, Elijah John Bowdre, has accepted an invitation from Marian Orr, CEO of the American CryptoFed DAO and the first DAO established under the Wyoming DAO law, visits Cheyenne and Laramie, Wyoming between 20.-22. October for educational talks with Wyomings Lawmakers, regulators, and thought leaders for the state’s successful cryptocurrency and blockchain initiatives.

Miami-Dade County

“Words cannot express how grateful I am for the educational discussions we have had and insights from leaders, including:

  • State Senators Chris Rothfuss, & Tara Nethercott
  • State Representative Ocean Andrew
  • Deputy State Secretary Karen Wheeler
  • Landesbank officer, Albert Forkner, Wyoming Division of Banking
  • Brenda Henson, Director of Wyomings Department of Revenue & Terri Lucero, Administrator of the Excise Department
  • Steven Lupien, Director of University of Wyoming Center for blockchain and digital innovation
  • Ashley Harpstreith, Executive Director of the Wyoming Taxpayers Association
  • Matt Kaufmann, Partner at Hathaway and Kunz, LLP.

Together, these innovative minds gave me deep insights into the Wyomings Success in creating and applying cryptocurrency and blockchain laws and regulations that today affect states and nations far beyond their borders Wyomings geographical boundaries. As chairman of the Miami-Dade County’s Cryptocurrency Task Force, my meetings with these leaders have provided me with comprehensive and practical guidance to provide a framework for discussing policy recommendations for. to accomplish Miami-Dade County with my colleagues. I am now planning to invite a delegation from Wyomings Cryptocurrency and Blockchain Guide to meet my Task Force colleagues at our home Miami-Dade County, and investigate the possibility of collaboration between Wyoming and Miami dade. This will likely extend to all of them Florida“, called Elijah John Bowdre, Chairman of the Miami-Dade County’s Cryptocurrency Task Force.

“I am so happy that Chairman Bowdre was able to meet with our state’s lawmakers and regulators and see how and why” Wyoming Laws, regulations and creative spirits have led to this Wyoming to become the leading blockchain and cryptocurrency jurisdiction, not just in the United States of America, but also in the world. It was a great honor to meet and introduce Chairman Bowdre to him Wyomings Cryptocurrency and blockchain lawmakers, regulators and thought leaders and for a coordinated path between Wyoming and Miami dade for future prosperity. Chairman Bowdre and his task force have an unprecedented and challenging mission, the feasibility of. to investigate Miami-Dade County Accepting cryptocurrency and other forms of digital money as an acceptable method of payment for the county’s taxes, fees, and services. As a former mayor of Cheyenne, Wyoming, I fully understand that it is vital for local governments to create new sources of income and provide better services to their citizens without increasing the tax burden on the city’s residents or businesses. I am very grateful for that Wyomings Executives who made Chairman Bowdre’s visit so successful that further collaboration and collaboration between Wyoming, Miami-Dade County and Florida just starting. “said Marian Orr, CEO of the American CryptoFed DAO.

Learn more about the Miami-Dade County’s Cryptocurrency Task Force:

Learn more about the American CryptoFed DAO:

(PRNewsfoto / American CryptoFed DAO)(PRNewsfoto / American CryptoFed DAO)

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SOURCE American CryptoFed DAO

The above press release is courtesy of PRNewswire. The views, opinions, and statements contained in the press release are not endorsed by, nor do they necessarily reflect those of Gray Media Group, Inc.

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