By Evgenia Belyavskaya, EA, Partner
While U.S. individuals and businesses have long dealt with Foreign Bank and Financial Account Reporting (FBAR) and Foreign Account Tax Compliance Act (FATCA) reporting requirements relating to foreign bank accounts and certain foreign assets, one area that still may be confusing to many is the treatment of cryptocurrency. Given cryptocurrency’s novel status, how does it fit into these rules? Does it need to be reported? Could the current rules be in for a change?
Cryptocurrency has been excluded from FBAR requirements to date. However, with the recent proposed regulations, FinCEN (Financial Crimes Enforcement Network) is looking to include foreign cryptocurrency accounts in FBAR reporting. An example of such holdings may include Bitcoin, Ripple or Ethereum that are held in the accounts outside of the United States.
Read on for more information about how the changing standards could affect your reporting.