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14 Duke L. & Tech. Rev. 48 (2015-2016)
The Evolution of Giving: Considerations for Regulation of Cryptocurrency Donation Deducations

handle is hein.journals/dltr14 and id is 48 raw text is: THE EVOLUTION OF GIVING: CONSIDERATIONS FOR REGULATION OF CRYPTOCURRENCY DONATION DEDUCTIONS ASHLEY PITTMANt ABSTRACT This Issue Brief looks at the rapidly growing area of cryptocurrency donations to nonprofit organizations. Given the recent IRS guidance issued on taxation ofBitcoin, specifically its decision to treat cryptocurrencies as property, questions now arise as to how charitable contributions of the coins will be valued for tax deductions. Though Bitcoin resembles most other capital gain property, its volatility, general decline in value, anonymity, and potential for abuse require specific guidance on valuation and substantiation so as to handle its unique nature and prevent larger deductions for charitable contributions than those to which taxpayers are entitled. INTRODUCTION In April of 2014, the Internal Revenue Service (IRS) finally heeded the repeated calls for guidance on tax treatment of cryptocurrencies by issuing Notice 2014-21.1 In it, the IRS dictated that cryptocurrencies would be treated as property (rather than a foreign currency or other type of asset), and that mined coins would be taxed as self-employment income.2 Though this guidance answered many questions, it left many others unanswered, such as the specifics regarding deductions for charitable contributions of Bitcoin.3 Cryptocurrency donations are steadily on the rise. The Wikimedia Foundation, Epic Change, the Church of Saint John the Evangelist, and many other nonprofits are now accepting contributions in t Duke University School of Law, J.D. expected 2016; North Carolina State University, B.A. in English, 2011. The author would like to thank Professor Richard Schmalbeck for his guidance and tax wisdom, and Zackary Scholl for his Bitcoin expertise and encouragement. All mistakes are my own. 1 I.R.S. Notice 2014-21, 2014-16 I.R.B. 938 (discussing virtual currency in general). 2id 3 For the most part I will refer to Bitcoin as the representative of all cryptocurrencies due to its popularity, comparatively high value, and the larger number of resources available to its users-however, most of this analysis will also apply to Namecoin, Litecoin, Dogecoin and the like.

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