IRS discusses crowdsourcing, convertible virtual currency

September 3, 2020

In a recently released memorandum, the IRS discussed the taxation of convertible virtual currency received in a crowdsourcing market.

According to the memorandum, convertible virtual currency is taxable as ordinary income if received in exchange for performing a microtask in a crowdsourcing platform.

The memorandum explained that crowdsourcing refers the ability to use the internet to outsource assignments or tasks to a group of individuals. In short, a person uses a platform and disseminates tasks to potential workers, who can then perform the task and submit the work (typically in exchange for a fee). Learn more.

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