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Sunday, March 30, 2014

IRS Notice 2014-21



To get started, you should get your own copy of IRS Notice 2014-21. You can do that now by clicking here.


Now that you have your own copy, lets move forward with covering the Q&A. Each section will be posted and open for questions and feedback. AfriCoin will submit your questions to the right party listed in SECTION 5. DRAFTING INFORMATION. Once we receive the answers, they will be posted where the question was asked. There will be some of you that have a great deal of knowledge in this area. I say, move on to a section that's more interesting or stay and help others that need your input.

Notice 2014-21 
SECTION 1. PURPOSE
This notice describes how existing general tax principles apply to transactions using virtual currency. The notice provides this guidance in the form of answers to frequently asked questions.

There it is. Does anyone have any questions or comments about section 1? This is important stuff and it will be of great benefit to stay ahead of the curve.

Click here for SECTION 2. BACKGROUND

9 comments:

  1. first I want to say good job on taking the initiative to inform your audience. Section one starts out with the words, "this notice." This is important because one word can change everything. The Merriam Webster online dictionary states that the word "notice" means the following:

    : information that tells you or warns you about something that is going to happen

    : a statement telling someone that an agreement, job, etc., will end soon

    : attention that people give to someone or something

    If we are going to get off to a good start here, which one of these definitions is the IRS using? The third one is general but the first one could mean that the new rules and regulations are not yet in effect. I'm not sure how the second one fits with the notice.

    While I'm sure others will have some answers here, I would like to take you up on getting the answer from the IRS. I think you are on to a good start and I'm testing you to see if you are going to follow through.

    Thanks

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    1. Greetings Mr. Mike Brothers, I have reached out to the IRS concerning your question. I did call Mr. Keith Aqui, of the office of Associate Chief Counsel (Income Tax & Accounting). I have not received an answer as of yet. Find below the transcript of my communication:

      Greetings Mr. Keith Aqui, my name is Michael, located in Athens GA. I have a question
      regarding further information about income tax issues addressed in Notice: 2014-21, concearning IRS Virtual Currency Guidance.

      My question is concearning the word NOTICE in section 1. PURPOSE.

      Is this notice a statement of what's to come, or is this notice a statement of what's in effect?

      Thank you for your time in this matter and I look forward to your response.

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    2. Thanks! I feel good about the AfriCoin Network. Keep me updated on the response.

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    3. At 2pm est, I received a call from Mr. Keith Aqui. He was very pleasant over the phone and he answered the question at hand. Mr. Aqui stated that, although the question is not immediately answered, the answer is, "yes, the effects of the new rules and regulations are retroactive to the Notice.

      Mr. Aqui further stated that, the question is clearly defined in, Q-16: Will taxpayers be subject to penalties for having treated a virtual currency transaction in a manner that is inconsistent with this notice prior to March 25, 2014?

      Answer:
      Taxpayers may be subject to penalties for failure to comply with tax laws. For example, under payments attributable to virtual currency transactions may be subject to penalties, such as accuracy-related penalties under section 6662. In addition, failure to timely or correctly report virtual currency transactions when required to do so may be subject to information reporting penalties under section 6721 and 6722.

      However, penalty relief may be available to taxpayers and persons required to file an information return who are able to establish that the underpayment or failure to properly file information returns is due to reasonable cause.

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    4. Thank you sir! Job well done.

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  2. This is insanity!

    Read my entire article here: http://wp.me/p4id81-2f

    We are attempting to make something strong out of a system of entrapment. I was not going to comment on the recent news in regards to the IRS and Bitcoin, but I am glad my brothers here opened up the floor for a discussion.

    Firstly, I think there will be a strong uprising in Bitcoin.

    Secondly, In section 2 they clearly say that Bitcoin “In some environments, it operates like “real” currency -- i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the
    country of issuance -- but it does not have legal tender status in any jurisdiction.“ Which in reality means it actually operates as intended in environments that are not “any jurisdiction” or "their jurisdiction" thereby being independent and sovereign.

    Lastly, This represents a great business opportunity for the software developer that can code a Bitcoin Tax Calculation App. Maybe a Bitcoin plugin that could add the tax information to the code block or something. I would only hope to be apart of that team of developers.

    Either way, this virtual currency journey will continue to be a battle for all involved.

    Read my entire article here: http://wp.me/p4id81-2f

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    Replies
    1. Perry, I did read your article. Very good. I almost wish you did not post the idea of the crypto tax app. lol,,,, Great Idea! Unfortunately, I'm not a programmer. Some one is going to make ton of money on that one. Take it a step further, make it a Turbo-Tax plugin. Peace.

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    2. Ashe, Exactly! Thanks man. Though I am a programmer myself, I wouldn't find the time to sit there and put it together anyway. That's why I put the idea out there. Hopefully, one of our brothers could catch it while it's hot and build the entire community. I'm looking forward to that response from the IRS to your question as well. Good luck bro!

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    3. Hey greetings brother Perry! Its good to see you active in the building. Your tax app idea is right on point. I did get a call from the IRS and have posted the answer to the question.

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