Based in Washington, DC, Lori Hellkamp is a tax attorney with extensive experience in international tax structuring, M&A, and tax controversy. One topic in which Lori Hellkamp has in-depth knowledge is the (evolving) law applicable to the taxation of cryptocurrencies and other digital assets.

For tax purposes, the IRS considers cryptocurrency to be property, which generally makes gains or losses related to the exchange or sale of most digital assets subject to tax. Transactions involving digital assets must generally be reported by individuals on form 1040, which now contains a question expressly asking whether the taxpayer has received (as a reward, award, or payment for property or services), sold, exchanged, or otherwise disposed of a digital asset (or a financial interest in a digital asset) during the tax year. At the same time, the IRS is working in collaboration with blockchain analytics providers on the enforcement side to identify those who may be using cryptocurrency as a means of hiding income and evading tax.

Multiple, discrete pieces of administrative guidance have been released over the past few years, including a clarification of the agency's position that deductions generally may not be claimed for cryptocurrency losses (lacking a sale or taxable disposition) so long as the asset's value remains above zero. Proposed regulations were promulgated in 2023 providing guidance on the statutory changes to certain tax reporting requirements made by Congress in the 2021 Infrastructure Investment and Jobs Act. The 2021 law introduced additional information reporting requirements for sales and exchanges of digital assets and expanded the scope of brokers responsible for such reporting.