Tax Alerts

IRS Requests Comments on Treating NFTs as Collectibles, Notice 2023-27

The IRS requested comments on its intention to treat certain nonfungible tokens (NFTs) as collectibles under Code Sec. 408(m). If an NFT is treated as a collectible, an IRA’s acquisition of the NFT would be treated as a distribution equal to the cost of the NFT. In addition, treating NFTs as collectibles would affect the long-term capital gains tax rate under Code Sec. 1(h). For this purpose, the IRS defines an NFT as a unique digital identifier that is recorded using distributed ledger technology and may be used to certify authenticity and ownership of an associated right or asset, such as a digital file, digital music, the right to attend a ticketed event, or ownership of a physical item.

Pending the issuance of the anticipated guidance, the IRS intends to determine whether an NFT is a collectible by analyzing whether the NFT’s associated right or asset is a Code Sec. 408(m) collectible. Under this “look-through analysis,” if the NFT’s associated right or asset is a Code Sec. 408(m) collectible (for example, an NFT that certifies ownership of a gem), then the NFT is treated as a collectible. Similarly, if the NFT‘s associated right or asset is not a collectible (for example, a right to use a plot of land in a virtual environment), then the NFT is not treated as a collectible. If the NFT‘s associated right or asset is a digital file, the IRS would apply the look-through analysis by asking whether the digital file constitutes a “work of art” under Code Sec. 408(m)(2)(A). If it does, the NFT would be a Code Sec. 408(m) collectible.

The Treasury and IRS requested comments on any aspect of NFTs affecting an NFT’s treatment as a Code Sec. 408(m) collectible. In particular, the IRS solicited comments on the definition of NFTs, how the look-through analysis might be applied to an NFT with more than one associated right or asset, and what factors to consider in determining whether a digital file associated with an NFT is a “work of art.”

2025 Standard Mileage Rates Released (Notice 2025-5; IR-2024-312)

The IRS released the optional standard mileage rates for 2025. Most taxpayers may use these rates to compute deductible costs […]

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2025 Standard Mileage Rates Released (Notice 2025-5; IR-2024-312)

IRS Introduces New Measures to Combat Tax Scams During 2025 Filing Season (IR-2025-12)

The IRS, in partnership with the Coalition Against Scam and Scheme Threats (CASST), has unveiled new initiatives for the 2025 […]

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IRS Introduces New Measures to Combat Tax Scams During 2025 Filing Season (IR-2025-12)

IRS Reminds Taxpayers of Disaster Deadlines (IR-2025-1)

The IRS reminded disaster-area taxpayers that they have until February 3, 2025, to file their 2023 returns, in the entire […]

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IRS Reminds Taxpayers of Disaster Deadlines (IR-2025-1)

IRS to Issue Automatic Recovery Rebate Credit Payments for 2021 Tax Year (IR-2024-314)

The IRS has announced plans to issue automatic payments to eligible individuals who failed to claim the Recovery Rebate Credit on their […]

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IRS to Issue Automatic Recovery Rebate Credit Payments for 2021 Tax Year (IR-2024-314)

FL - Motor vehicle sales tax rates by state issued

Florida has issued motor vehicle sales tax rates by state as of January 15, 2025. Florida law allows a partial […]

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FL - Motor vehicle sales tax rates by state issued

FL - 2025 governmental leasehold intangible tax valuation factor table released

For purposes of calculating the 2025 intangible personal property tax on governmental leaseholds, the Florida Department of Revenue has issued […]

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FL - 2025 governmental leasehold intangible tax valuation factor table released

Security Summit Urges Updating Digital Security to Prevent Identity Theft, IR-2024-306

The IRS, along with Security Summit partners, urged businesses and individual taxpayers to update their security measures and practices to protect against […]

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Security Summit Urges Updating Digital Security to Prevent Identity Theft, IR-2024-306

2024 Required Amendments List Issued, Notice 2024-82

The IRS has issued its 2024 Required Amendments List (2024 RA List) for individually designed employee retirement plans. RA Lists […]

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2024 Required Amendments List Issued, Notice 2024-82

IRS Reminds Low- and Moderate-Income Taxpayers of Saver’s Credit to Save Retirement Savings in 2025 and Future Years, IR-2024-298

The IRS reminded low- and moderate-income taxpayers to save for retirement now and possibly earn a tax credit in 2025 […]

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IRS Reminds Low- and Moderate-Income Taxpayers of Saver’s Credit to Save Retirement Savings in 2025 and Future Years, IR-2024-298

IRS and Security Summit Partners Warn Against Bad Tax Advice on Social Media, IR-2024-302

The IRS and Security Summit partners issued a consumer alert regarding the increasing risk of misleading tax advice on social media, which […]

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IRS and Security Summit Partners Warn Against Bad Tax Advice on Social Media, IR-2024-302