The U.S. Internal Revenue Service appears to be blinded by its own enthusiasm on crypto taxation, instead creating an excessive financial burden.
The United States Internal Revenue Service (IRS) stretches the tax rules to fit its cryptocurrency agenda. At no time in tax history has pure creation been a taxable event. Yet, the IRS seeks to tax new tokens as income at the time they are created. This is an infringement on traditional tax principles and problematic for several reasons.
In 2014, the IRS stated in an FAQ within IRS Notice 2014-21 that mining activities would result in taxable gross income. It is important to note that IRS notices are mere guidances and are not the law.
The IRS concluded that mining is a trade or business and the fair market value of the mined coins are immediately taxed as ordinary income and subject to self-employment tax (an additional 15.3%).
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