Cryptos Earned from Microtasks Are Taxable: IRS

The United States Internal Revenue Services (IRS) has confirmed that Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term earned from microtasks through various crowdsourcing platforms are considered as taxable income.

The agency clarified its stance in a memo published on August 28 but was drafted in late June. This was in response to an inquiry by the US agency's Small Business/Self Employed Division.

In the memo, the questionnaire asked that if “convertible virtual currency” received by anyone in exchange for microtasks on various platforms are taxable, and in response, the IRS wrote “yes.”

“...a taxpayer who receives convertible virtual currency in exchange for performing a microtask through a crowdsourcing platform has received consideration in exchange for performing a service, and the convertible virtual currency received is taxable as ordinary income,” Ronald Goldstein, author of the IRS memo, stated.

He also specified the nature of microtasks that many indulge in, earning a small amount of crypto.

“...a firm may offer to pay workers in units of Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term or other convertible virtual currency if the worker processes data or reviews images,” the memo detailed.

Many also earn digital currencies by “a comment, downloading games and reaching certain milestones, completing online quizzes and surveys, or registering accounts with various online services.”

Rush for Crypto Tax Regulations

Without any proper crypto taxation framework in the United States, taxpayers often refrain from declaring small incomes obtained in digital currencies. Though the recent step does not show the agency’s move towards streamlining the taxation process, it surely shows the seriousness of the IRS in imposing taxes on crypto gains.

Last week, Finance Magnates reported on the fresh notices sent by the tax department to the potential cryptocurrency investors seeking a declaration of their investments.

Meanwhile, to bring a proper digital currency taxation framework, the department is also working with the industry players.