Bitcoin is a new virtual currency, that is fast becoming an interesting part of deals and transfers between all sorts of folk but mainly it is the Libertarians, hackers, and computer scientists who are praising this net cash!
Basically, what we are talking about here is a non centralized currency, it is based on a system developed by programmers back in 2009, it is valued against the US Dollar and transactions take place on a secure network with no third party involvement, you simply pay and collect direct.
There are of course with any system such as this, concerns over security and just who is using this system to transfer and receive money.
According to Jeff Garzik, who is a member of Bitcoin’s core software development team, he said in an email;
“Bitcoins are not ‘tax free’ in any way. For US citizens, Bitcoins are at a minimum subject to capital gains tax. IRS barter income regulations and other tax codes may also apply. U.S. and state money transmitter regulations may also apply, among others.”
Source [PC Mag]