Law Offices of Connie Yi, PC
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at (925) 484-0888 or email us directly at [email protected] to schedule the consultation.

View Our Practice Areas

No FBAR requirement this year for taxpayers with Bitcoin holdings

The Internal Revenue Service's position on digital currency such as Bitcoin continues to evolve. As we discussed previously, the IRS issued a decision in March to categorize Bitcoin as taxable property and not official currency. While Bitcoin essentially functions as money, no nation recognizes digital currency as legal tender, though the IRS decision means that federal income taxes and payroll taxes will apply to wages paid in Bitcoin.

In an interesting turn of events, however, an analyst from the IRS disclosed that taxpayers will not have to report Bitcoin holdings, at least not this tax season.

If you have money in a foreign bank, then you are probably aware of the Report of Foreign Bank and Financial Account (FBAR), also known as Form 114. You have to file Form 114 with the Financial Crimes Enforcement Network (FinCEN) if you have more than $10,000 in a non-U.S. bank. However, this tax season, holders of Bitcoin will not have to report the property on the FBAR, though that policy may change in the future.

Back in March, the IRS said that holders of Bitcoin would have to pay a capital gains tax, as they would with stocks or bonds. In May a director at the IRS Criminal Investigation division said the agency plans to closely scrutinize digital currency to prevent abuses.

The most recent announcement comes as the June 30 deadline for electronic FBAR filing quickly approaches.

If you have questions about tax compliance, then a tax law attorney can help clarify your options and protect your interests.

Source: Bloomberg BNA, "IRS: No Bitcoin Reporting on FBARs for This Filing Season, but Future Changes Possible," Alison Bennett, June 5, 2014

No Comments

Leave a comment
Comment Information

Contact Us

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Email Us For A Response

Office Locations

Law Offices of Connie Yi, PC
323 Ray Street
Pleasanton, CA 94566

Phone: 925-484-0888
Pleasanton Law Office Map

19925 Stevens Creek Blvd
Suite 100
Cupertino, CA 95014

Toll Free: 888-312-6978
Map & Directions

San Francisco
490 Post Street, Suite 508
San Francisco, CA 94102

Toll Free: 888-312-6978
Phone: 415-433-3350
Map & Directions