Crypto Lawsuits Seek to Shape Tax Treatment of Newly Made Tokens

Two federal court cases are serving as the testing grounds for when certain kinds of newly created cryptocurrency become taxable income, in an area where some legal observers say regulators haven’t yet established clear rules.

The cases, Jarrett v. United States and Rogovy v. Commissioner, are brought by cryptocurrency advocates challenging the IRS’s treatment of digital asset activity. The cases could sidestep current IRS guidance, said Omri Marian, a professor at the University of California, Irvine School of Law who focuses on taxation and blockchain technology.

“What they’re pursuing is tax exemptions in places where there is no ...