The Internal Revenue Service (IRS) issued a memorandum in October addressing the tax liability for digital asset rewards in accounts frozen due to bankruptcy. The guidance, which has been sent to Michael R. Fiore of the IRS Small Business/Self-Employed Division, examines a hypothetical taxpayer (known as "Taxpayer A") who held cryptocurrency in an account on a bankrupt platform and received rewards, such as a pledge bonus, before the account was frozen. According to the IRS regulations: Taxpayer A received the award in the first year before the account was frozen, and must include the fair market value of the date and time the award was received in the first year's gross income... even if the account remained frozen on December 31 of the first year. This interpretation follows the provisions of Sections 61 and 451 of the Internal Revenue Code, which state that income must be recognized in the year it is received, regardless of whether it cannot be obtained later.