IRS: Crypto Income Related to Crowdsourcing is Taxable
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Aug. 31, 2020
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The US Internal Revenue Service (IRS) has said through a memorandum published on August 28 that crypto income related to microtasks on crowdsourcing platforms is taxable.

The memorandum was written by the agency in response to a question from the US Small Business/Self Employed Division.

Specifically, the RSI addresses the question of whether "convertible virtual currency received by an individual for performing a microtask through a crowdsourcing or similar platform should be considered as taxable income."

In relation to this, the RSI's answer is clear:

"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."

The document provides some examples, such as a user receiving virtual currencies 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.

According to the document, "a taxpayer who performs a task through a crowdsourcing platform, including a microtask, has performed a service for the party that requested the task with the expectation that he or she will receive compensation. If the taxpayer receives convertible virtual currency for performing the task, regardless of the value and the manner in which it is received, then the taxpayer has been compensated with property."

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