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IRS Denies Bitcoin Exalted Currency Status
The IRS has issued its long-awaited stance on the tax treatment for virtual currencies like Bitcoin (IRS Notice 2014-21). In short, the taxpayer must treat Bitcoin as property for federal tax purposes. The effect of this decision on the viability of the virtual currency is unclear, and small businesses accepting Bitcoin, and their accountants, are scratching their heads as to how this classification will play itself out for daily transactions.