On March 1, 2022, the Internal Revenue Service issued a notice (Link: Tax Time Guide: IRS reminds taxpayers to report gig economy income, virtual currency transactions, foreign source income and assets | Internal Revenue Service) reminding taxpayers of their reporting obligations regarding the “gig” economy, virtual currency transactions, and foreign source income and assets.
The “gig” economy involves activity where taxpayers earn income by providing on-demand work, services or goods, typically through a digital platform, app, or website. Such activity may trigger a reporting requirement where the taxpayer receives compensation for such services in the form of cash, property, goods, or virtual currency. Examples of “gig” activity include, but are not limited to, driving a car for booked rides or deliveries, selling goods online, providing creative or professional services through a digital platform, or providing on-demand freelance work.
In this recent notice, the IRS also continues to remind taxpayers of their obligations to report certain transactions involving virtual currency, such as the receipt of virtual currency as payments for goods and services, sales of virtual currency, and certain dispositions of a financial interest in virtual currency.
The IRS also reminded taxpayers of their obligations to report worldwide income, including income from foreign trusts, foreign banks, and other financial accounts. The proper reporting of foreign sourced income and assets will remain a focus of the IRS for the foreseeable future.
About Post Author
Eric Butler is a Shareholder in the firm and manages the firm’s Tax Practice Group. Mr. Butler focuses his legal practice in the areas of federal and state taxation, business formations, complex commercial litigation, tax controversy matters, white collar criminal defense, and estate planning/probate matters. Mr. Butler handles a large range of business and tax matters for clients across the United States involving the Internal Revenue Service and state taxing authorities, to include examinations of returns, collection of delinquent tax debts, criminal tax matters, international tax compliance and enforcement, and trial and appellate litigation of tax issues in both state and federal courts. Mr. Butler also represents and consults with accountants across the United States in malpractice defense, mitigation of potential malpractice claims, and disciplinary proceedings.
Mr. Butler received a three-year appointment (2013-2015) to the Taxpayer Advocacy Panel, which is a federal advisory panel established in 2002 under the authority of the U.S. Department of the Treasury. The Taxpayer Advocacy Panel (TAP) is comprised of volunteers appointed by the Secretary of the Treasury to represent all 50 states, the District of Columbia and Puerto Rico. TAP members are assigned to separate Project Committees and include at least one representative from each state. Mr. Butler served on the Tax Forms & Publications Project Committee during his three-year term, which works to provide feedback to various divisions within the Internal Revenue Service on issues involving tax administration and improvements to tax forms and publications. In 2015, Mr. Butler served as Vice-Chair of the Tax Forms and Publications Project Committee. In 2016, Mr. Butler was awarded the Volunteer Service Award by the President of the United States for his contributions to TAP during his three-year term.
