Bloomberg Tax
Aug. 30, 2021, 5:33 PM

U.S. Pushes Back on Lawsuit Testing Cryptocurrency Taxation

Aysha Bagchi
Aysha Bagchi

A lawsuit testing the way the U.S. taxes newly-created cryptocurrency mischaracterizes the virtual currency at issue, the government said in a court filing.

The answer to Joshua and Jessica Jarrett’s May complaint at the U.S. District Court for the Middle District of Tennessee disagreed with the couple’s description of how Joshua Jarrett acquired the cryptocurrency units, known as Tezos tokens, on which they paid income taxes. The couple has said they were wrongly taxed on tokens Joshua Jarrett created in 2019 because federal income tax law doesn’t allow for taxing people simply because they have created new ...