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.