The rise of bitcoin and other forms of digital currency is fueling a wealth of questions about tax enforcement: what sort of tax treatment guidelines exist for digital currencies? How are tax reporting agencies responding to the large number of digital currencies that now exist worldwide? To what extent is virtual money being used for tax avoidance purposes?
All of this has sparked fervent conversations among those being paid in bitcoin, those simply investing in it, and many of the anarcho-capitalist bent who view taxation as theft. And given prevailing issues around tax havens, offshore accounts, encryption and the Panama Paper revelations, many would argue that prevailing tax monitoring systems are prime for disruption.
In an interview with Bitcoin Magazine, Certified Public Accountant Daniel Winters, addressed ways to make sense of this increasingly complex U.S. taxation landscape. His boutique firm Global Tax Accountants is one of only a handful worldwide that focuses on the tax ramifications of digital currency and blockchain transactions.
Winter’s journey to this narrowly defined niche is an interesting one. Hearing about bitcoin’s growing popularity in 2013, he ponied up some money and purchased a tiny amount. He became fascinated with Bitcoin’s trustless, peer-to-peer system of exchanging value that