Cryptocurrency case filed towards the IRS raises vital questions in regards to the taxation of newly created property

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WASHINGTON, May 26, 2021 / PRNewswire / – Today Joshua JarrettThe American taxpayer and participant in the Tezos blockchain protocol, represented by Fenwick & West LLP, filed a lawsuit against the Internal Revenue Service (IRS) seeking reimbursement of taxes paid on tez direct opposition to over 100 years of US -Tax law.

Newly created property, be it a work of art or a baked good, is not considered income under US tax law until it is sold. Innovators and entrepreneurs who participate in the use of blockchain are no different from artists and bakers. If they are subject to a different tax treatment, they may need to go to other countries with fairer tax laws in which they operate. Blockchain technology for proof of use is significantly less energy-intensive than proof of work systems and has established itself worldwide as the blockchain consensus technology of choice.

Joshua JarrettThe plaintiff in the case, which was filed in the US District Court, said, “Like any property, cryptocurrency tokens can be income if received in payment or compensation. But these newly created tokens are like crops harvested by a farmer – what will only be taxed when they are sold. “

Proof of stake has become the predominant form of consensus mechanism, replacing proof of work for most second and third generation blockchain protocols. Proof-of-stake protocols are currently rated over $ 415 billion. In addition, Ethereum, the second largest and most widely used protocol in the world, is in the middle of transition to evidence of stake.

“This is a matter of practical and economic concern,” he added Evan Weiss, Founder of the Proof of Stake Alliance, a group dedicated to facilitating conversation and raising awareness of proof of stake technology. “The wrong policy would drive innovation elsewhere, and our goal is The United States To be the leader in this new and promising technology. Fortunately, the right policy is established under current law: These new tokens – like all forms of new property – are not income until they are sold. “

The full submission can be read on the POSA website at Proofofstakealliance.org.

About POSA
The Proof of Stake Alliance (POSA) serves as a unified voice to support, grow, and protect the Proof of Stake-based technologies and innovations that will power the next generation of the Internet. Visit Proofofstakealliance.org for more information or to inquire about membership.

Media contact: Jackie Zupsic, [email protected]

SOURCE The Jarretts