With penalties for not reporting such accounts correctly ranging from $10,000 to $100,000 per violation, and the deadline for electronic FBAR reporting today, it’s hardly surprising that many investors and their accountants have been pleading with the IRS for guidance.
Today, the IRS made things easy: Bitcoin isn’t a foreign currency or account, and as such does not need to be reported on the FBAR.
As Forbes reports, informal guidance on the bitcoin-reporting issue has been available since June 4, thanks to comments from the IRS’s Small Business/Self-Employed Division. IRS analyst Rod Lundquist noted in a conference call that “FinCEN has said that virtually currency is not going to be reportable on the FBAR, at least for this filing season.”
Forbes claims that this places bitcoin reporting much in the same category as gold or other commodities. They definitely must be reported, but not on the FBAR:
Here’s how it seems to shake out for now: for FBAR purposes, those Bitcoin held individually in a wallet aren’t reportable. You can think of it like gold in that regard: gold coins, other precious metals or foreign currency held directly are not reportable for FBAR purposes.