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Should you hear a client talk about the ups and downs of their Bitcoin or other cryptocurrency investments, those comments are a little scary for a couple of reasons.
By Edward R. Jenkins Jr., CPA, CGMA
You may hear a client – or maybe a coworker or friend – talk about the ups and downs of their Bitcoin and other cryptocurrency investments. From a CPA’s perspective, those seemingly benign comments are a little scary for a couple of reasons:
Here’s the bottom line: A lot of people are investing in cryptocurrency, and many of those people are not in compliance with tax law. For those with cryptocurrency holdings in non-U.S. exchanges, that could mean big trouble due to the potential penalties for not reporting foreign bank accounts and assets. Loss of the OVDP is a big problem for those taxpayers who would like to become compliant, avoid a criminal record, and reduce the potential penalties.
Here is a link to my AICPA Tax Insider article. Find out the federal tax implications of cryptocurrency holding before it burns you or one of your clients.
Edward R. Jenkins Jr., CPA, CGMA, is an instructor of accounting at Pennsylvania State University in University Park, Pa., a tax consultant for Boyer & Ritter LLC in State College, Pa., and a member of the PICPA Federal Taxation Committee and Pennsylvania CPA Journal Editorial Board. He can be reached at erj2@psu.edu.