Market Overview

Bitcoin Is Not Reported On 2013 FBARs

Bitcoin investors store bitcoin on foreign exchanges in countries like Estonia, Russia and elsewhere. Do they have to file bitcoin holdings outside the U.S. on 2013 FBARs due June 30? The IRS just said no.

Per Thomson Reuters/Tax & Accounting:

"IRS official: taxpayers don't have to report virtual currency on 2013 FBARs" Excerpts:

“During a recent webinar, an IRS official stated that for purposes of the current filing season, taxpayers aren't required to report virtual currencies on a Report of Foreign Bank and Financial Accounts (FBAR) with the U.S. Treasury. However, although this previously disputed matter is settled for the present, he stated that this position may well be subject to change.”

“Virtual currency isn't subject to FBAR reporting... for now. During a recent IRS webinar titled "Reporting of Foreign Financial Accounts on the Electronic FBAR," Rod Lundquist, Senior Program Analyst in IRS's Small Business/Self Employed (SB/SE) division, stated that for purposes of the current filing season (i.e., for 2013 FBARs due later this month), taxpayers aren't required to report Bitcoin on an FBAR. However, he cautioned that IRS is continuing to analyze virtual currency and that this policy could very well change going forward.

The issue of whether Bitcoin is subject to FBAR reporting has been widely debated among the financial and tax online community. One view is that, unless a taxpayer can prove that their bitcoins are within the U.S. (a potentially tricky proposition), then their owner would be required to file an FBAR if his holdings exceed $10,000. However, others question whether a Bitcoin account is truly a "financial account" with a "financial institution" for purposes of the FBAR rules-and, despite the IRS official's recent pronouncement, these questions are still unanswered.”

[b]See some of our other blogs on FBAR:[/b]
Tax Deadlines in June: U.S. Residents Abroad and FBAR (June 5, 2014)
http://www.greencompany.com/blog/index.php?postid=219

FBAR Deadline & Foreign Financial Asset Reporting Form 8938 Update (June 12, 2012)
http://www.greencompany.com/blog/index.php?postid=150
 

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Education Tech General

 

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