By Alison Bennett
June 4 — Taxpayers don't have to report Bitcoin on the FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), for the current filing season, an Internal Revenue Service official said.
Rod Lundquist, a senior program analyst for the Small Business/Self-Employed Division, cautioned June 4 that could change in the future as the IRS continues to monitor developments on virtual currency closely.
Lundquist's comments came during an IRS webinar as a June 30 deadline approaches for mandatory electronic FBAR filing.
Taxpayers must report foreign financial accounts with an aggregate value of $10,000 or more to the Treasury Department's Financial Crimes Enforcement Network, with the IRS responsible for audits and enforcement.
In answer to a question during the webinar, Lundquist said, “At this time, FinCEN has said Bitcoin is not reportable on the FBAR, at least for this filing season.” As the IRS continues to scrutinize the currency and how it is being used, taxpayers should be alert that the FBAR policy could shift, Lundquist said.
A key official said May 10 that the IRS Criminal Investigation division is putting virtual currency under the microscope.
“It's the wave of the future that's here today and the IRS is looking at ways we can stop abuses,” Rebecca Sparkman, CI director of operations, policy and support, said at the May meeting of the American Bar Association Section of Taxation. “Together we're going to have to look at how to deal with this new world”.
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