Digital assets are taxed as property, rather than currency. Gain or loss from digital asset exchanges for goods, services, U.S. dollars and other digital assets must be reported on a taxpayer’s federal income tax return. One individual recently pleaded guilty to criminal charges of filing false income tax returns when he failed to report income from digital asset transactions. Evidence uncovered by the IRS Criminal Investigation Unit showed that he acquired 97 pieces of digital artwork known as “Punks.” Then, he sold them for over $13.1 million yet answered “no” on his federal tax return when asked if he had digital asset income. He faces up to six years in prison and a fine.