Fenwick tax partner David Forst and associate Sean McElroy explore the evolving landscape of blockchain taxation in their chapter in the 2025 edition of Global Legal Insights’ Blockchain & Cryptocurrency Regulation guide.
Forst and McElroy examine how traditional tax principles are being adapted to address the complexities of blockchain transactions, including hard forks, staking, airdrops, and decentralized autonomous organizations (DAOs). The chapter highlights limited IRS guidance, such as IRS Notice 2014-21 and Revenue Rulings 2019-24 and 2023-14, which treat cryptocurrency as property and provide insight into the tax treatment of blockchain-related activities. The authors also discuss new regulatory requirements, unresolved issues like the taxation of newly created tokens, and the implications of decentralized finance (DeFi) for tax reporting. This comprehensive overview underscores the challenges and opportunities of applying longstanding tax principles to revolutionary technologies.
Read the full chapter here (subscription needed).