Bitcoin miners are subject to double taxation by the IRS, encountering taxes upon both mining and selling their bitcoin. While other commodities are typically taxed only at the sale point, bitcoin's unique treatment complicates its legal status. Efforts are underway to promote the U.S. as a leading center for bitcoin and cryptocurrency. Although regulatory efforts are progressing, major tax reforms to align the IRS's treatment of bitcoin with its classification as a commodity remain necessary for its full potential to be realized.
The taxman comes twice for bitcoin miners: once when they mine bitcoin and again when they sell it, making it the only commodity with such treatment by the IRS.
Policymakers have declared bitcoin as a commodity, yet the IRS's classification leads to unfair taxation, burdening miners and users alike.
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