In 2014, Notice 2014-21 provided guidance on the federal treatment of virtual currencies. In this notice, the Internal Revenue Service (IRS) stated, in general, virtual currencies are treated as property.
The IRS recently released Notice 2023-34. This notice updates Notice 2014-21 because it stated that digital currencies were not legal tender; however, since then foreign jurisdictions have enacted laws that characterize Bitcoin as legal tender. Thus, the sentence in the Background section of Notice 2014-21 stating that virtual currency does