The American Institute of CPAs has asked the Internal Revenue Service to revise the virtual currency question on the 2021 Form 1040. Among recommendations made by the organization was for clarification of the meaning of virtual currency.
That includes modifying the definition of virtual currency in the first paragraph of 1040 instructions to make it consistent with the definition in Rev. Rul 2019-24 and Notice 2014-21. The AICPA said instructions should state virtual currency refers only to convertible virtual currency and to provide examples.
The AICPA asked whether terms “unit of account,” “store of value” and medium of exchange” must all be present or if just one must be present and to have the form provide definitions of each term.
Another recommendation was that reference to assets with the “characteristics of virtual currency” should be removed from the form as that is not part of the IRS’ official and binding guidance. Additionally, there should be no mention of digital assets until the term has beem defined in final regulations under Section 6045.
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards. Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that. A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
