If the tax authorities are looking to claw-back on an income source that is one of the indicators of 'adoption'.
IRS has released a memo on Friday (Aug 28) to clarify that the crypto earned from microtasks is taxable income.
Microtasks could include writing this article and earning some crypto or using BRAVE browser and earning BAT, and ad infinitude.
The point is that the crypto is slowly spreading its roots and the authorities are taking notice.
Below is the question and conclusion listed by the IRS in the memo.
Question/issue
Is convertible virtual currency received by an individual for performing a microtask through a crowdsourcing or similar platform taxable income?
Conclusion
Yes, a taxpayer who receives convertible virtual currency in exchange for performing a microtask through a crowdsourcing platform has received consideration in exchange for performing a service, and the convertible virtual currency received is taxable as ordinary income.
While going through the facts IRS seems to be referring to the platforms that specifically split the big tasks to microtasks and pay the individuals using Crypto: "Certain microtasking platforms allow those who perform microtasks to receive payments in consideration for completing each microtask in the form of convertible virtual currency. For example, a firm may offer to pay workers in units of Bitcoin or other convertible virtual currency if the worker processes data or reviews images. Other examples include an offer of convertible virtual currency in exchange for downloading a particular app from an app store and leaving a positive review including a comment, downloading games and reaching certain milestones, completing online quizzes and
surveys, or registering accounts with various online services. "
However, in the same paragraph, IRS clubbed the 'rewards' as being part of this guidance: "These types of microtasks may provide individuals with “rewards” in the form of convertible virtual currency. The value of convertible virtual currency paid in exchange for a single microtask often is a small amount that may be less than $1. "
We believe this will include in its purview the micro payments we receive from using BAT browser or writing articles here.
You can read the IRS Memo here.
Many crypto-dwellers know that IRS has issued the DRAFT Form 1040 for 2020 which asks the virtual currency question right on the face of the tax return (which was hidden in a schedule on the 2019 return).
These steps taken by the IRS indicates that people who think can hide from the Big Brother will be surprised, not in a good way.
