CryptoTaxAudit Glossary

Back Taxes: This term refers to taxes that were owed in a previous year but were not paid. Back taxes can accrue interest and penalties, and dealing with them often requires navigating complex IRS processes.

Bags: In cryptocurrency slang, "bags" refer to large quantities of a specific cryptocurrency or token that an investor is holding. The term is often used in the context of holding an asset through periods of volatility in the hope of future profit.

Bankruptcy: A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (or on behalf of creditors) and results in the evaluation of the debtor's assets and liabilities.

Basis: In tax terms, basis refers to the amount of investment in something for tax purposes. For assets, it typically includes the purchase price plus any fees or commissions. It's used to calculate capital gains or losses when the asset is sold.

Beacon Chain: In the context of Ethereum, a cryptocurrency and blockchain platform, the Beacon Chain refers to a part of its major upgrade (Ethereum 2.0). It introduces proof-of-stake to the network, a more energy-efficient consensus mechanism than the previous proof-of-work system.

Bear Market: A term used in investing to describe a market condition in which prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. In a bear market, investors may anticipate losses as pessimism and selling increase.

Benchmark: In finance and investing, a benchmark is a standard or point of reference against which the performance of a security, mutual fund, investment manager, or investment strategy can be measured. For instance, stock market indexes like the S&P 500 are often used as benchmarks for assessing the performance of an investment portfolio.

BEP-2: This is a token standard on Binance Chain, the blockchain developed by the Binance cryptocurrency exchange. BEP-2 tokens are designed to provide a consistent set of rules and requirements for issuing tokens on the Binance Chain network, ensuring compatibility and ease of use.

BEP-20: A token standard for Binance Smart Chain (BSC), which is a parallel blockchain to Binance Chain. BEP-20 extends ERC-20, the most common Ethereum token standard, and is compatible with both Binance Chain and Binance Smart Chain, providing flexibility and functionality for token development.

BEP-721: A token standard used on Binance Smart Chain for NFTs, similar to the ERC-721 standard on Ethereum. It allows for the creation of unique tokens, each with distinct attributes and properties, commonly used in digital art, collectibles, and gaming.

BEP-95: This is a proposal on Binance Smart Chain aimed at implementing a real-time burning mechanism for a portion of gas fees. It's designed to reduce the overall supply of the native BSC token (BNB), potentially increasing its scarcity and value.

Beta: In finance, beta is a measure of the volatility—or systematic risk—of a security or a portfolio compared to the whole market. A beta greater than one indicates that the security's price is theoretically more volatile than the market.

Bid Price: The bid price is the highest price that a buyer is willing to pay for an asset in the financial markets. In the context of the stock and cryptocurrency markets, it's the opposite of the ask price, the lowest price a seller is willing to accept.

Bid-Ask Spread: This term refers to the difference between the bid price and the ask price in the market for an asset. It represents the cost of trading and is a crucial indicator of the liquidity and efficiency of the market.

Bitcoin: The first and most well-known cryptocurrency, Bitcoin, was created in 2009 by an unknown person (or persons) using the pseudonym Satoshi Nakamoto. It operates on a decentralized network of computers and was established as an alternative to traditional currencies controlled by governments and central banks.

Bitcoin Core: Bitcoin Core refers to the open-source software that is used to participate in the Bitcoin network, especially as a full node. It is essential for validating transactions and blocks on the Bitcoin blockchain.

Bitcoin Dominance: This is a metric that measures Bitcoin's market capitalization relative to the total market cap of all cryptocurrencies. It is used to gauge Bitcoin's market share and is an indicator of its market strength and influence.

Bitcoin Maximalists: This term refers to people who believe that Bitcoin, among all cryptocurrencies, is superior and will ultimately be the most widely used and dominant digital currency. They often argue that other cryptocurrencies are unnecessary or inferior to Bitcoin.

Bitcoin Pizza: Referring to a famous event in the early history of Bitcoin, where on May 22, 2010, a programmer named Laszlo Hanyecz bought two pizzas for 10,000 Bitcoins. This purchase is celebrated as 'Bitcoin Pizza Day' and is notable for being one of the first real-world transactions using Bitcoin.

Black Swan Event: A term used in finance to describe an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black Swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.

Block: In the context of blockchain technology, a block is a digital record of transactions. Each block contains a list of transactions and is linked to the previous block, forming a chain of blocks, hence the term "blockchain."

Block Explorer: A block explorer is an online tool to view all transactions, past and current, on a blockchain. It provides information such as transaction growth, network hashing power, and transaction history of a specific blockchain in a user-friendly manner.

Block Header: In blockchain technology, a block header is a portion of a block that includes essential metadata about the block. It contains references to the previous block (thus creating the chain), a timestamp, and other critical information used in the blockchain's functioning.

Block Height: The term refers to the number of blocks connected in the blockchain. Specifically, it's the position of a particular block in the entire blockchain. The first block, or genesis block, is at height 0.

Block Reward: This is the incentive given to blockchain miners for successfully validating a new block and adding it to the blockchain. The reward typically consists of newly created cryptocurrency and transaction fees.

Blockchain: A decentralized, distributed ledger technology that records transactions across many computers so that the recorded transactions cannot be altered retroactively. It underpins various cryptocurrencies and has applications in various fields like finance, supply chain, and healthcare.

Blockchain Address: In the realm of cryptocurrencies, an address is a unique string of characters that represents a destination for a cryptocurrency transfer. Similar to a bank account number, it is used to receive and send digital currency transactions on the network.

Blue-Chip Token: Similar to blue-chip stocks in traditional finance, these are cryptocurrencies that are considered relatively safer investments with a history of performance and a larger market capitalization. They are generally well-established within the cryptocurrency market.

Bollinger Bands: A technical analysis tool defined by a set of lines plotted two standard deviations (positively and negatively) away from a simple moving average (SMA) of a security's price. Bollinger Bands can help identify market volatility and price trends.

Bond: A fixed-income instrument representing a loan made by an investor to a borrower. It is a way for companies or governments to raise funds by borrowing from investors.

Bonus Depreciation: In tax, this refers to an additional amount of depreciation that can be claimed by a taxpayer for the cost of qualifying property in the year it is put into service. It is typically used to incentivize investment in new or improved business assets.

Bounty: In the context of cryptocurrencies, a bounty is a reward offered to incentivize certain tasks performed by users, developers, or members of the community. These tasks can range from software development to marketing activities.

BRC-20 Tokens: This term likely refers to a standard for issuing tokens, similar to Ethereum's ERC-20 standard, but it's not widely recognized or established. If you meant "BEP-20" for Binance Smart Chain or "ERC-20" for Ethereum, these are well-established standards for creating and issuing tokens on their blockchains.

Breakout: In financial markets, a breakout refers to a security's price moving outside a defined support or resistance level with increased volume. A breakout can be upward or downward and is often considered a signal for traders to enter a position in the direction of the breakout.

Bull Market: This term describes a financial market in which prices are rising or are expected to rise. The term is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.

Burden of Proof: In the context of taxation, this refers to the obligation to prove entries, deductions, and statements made on tax returns. In an audit, the burden of proof is usually on the taxpayer to substantiate the validity of their tax claims.

Business Income: This is the income that is received from the operation of a business or other enterprise. It typically includes payments received for goods or services, and it may be reduced by business expenses and deductions to determine taxable income.

Eclipse Attack: In the context of computer networks and cryptocurrencies, this is a type of cyberattack where a network node is isolated by overtaking all of its connections to other nodes. This can potentially disrupt network functionality and compromise security.

Economic Substance Doctrine: A principle in U.S. tax law where transactions must have economic significance other than mere tax benefits to be considered valid for tax purposes. This doctrine prevents taxpayers from using legally correct but economically meaningless transactions to avoid taxes.

Employed: This refers to a person who works part-time or full-time under a contract of employment, whether oral or written, expressed or implied, and who has recognized rights and duties. Employed individuals typically receive regular payment from an employer.

Employee Business Expenses (EBE): These are expenses that an employee incurs in the course of performing their job. Under the Tax Cuts and Jobs Act of 2017, most of these expenses are no longer deductible on federal tax returns for 2018 through 2025.

Enrolled Agent (EA): An enrolled agent is a tax advisor who is a federally authorized tax practitioner empowered by the U.S. Department of the Treasury. EAs are authorized to represent taxpayers before the Internal Revenue Service for tax issues, including audits, collections, and appeals.

Equities: Also known as stocks or shares, equities represent ownership interests in corporations. Investors who hold equities have rights to a portion of the company's assets and earnings.

ERC-1155: This is a token standard on the Ethereum blockchain. Unlike its predecessors, ERC-1155 allows for the creation of both fungible (currencies) and non-fungible tokens (like digital art) within a single contract. This multifunctionality provides increased efficiency and lower transaction costs.

ERC-20: ERC-20 is a standard used for creating and issuing smart contracts and tokens on the Ethereum blockchain. Many projects that launch on the Ethereum blockchain start out as ERC-20 tokens due to the ease of development and later on, migrate to native blockchains.

ERC-721: A token standard for NFTs on the Ethereum blockchain. Unlike ERC-20 tokens, ERC-721 tokens are unique and can represent different values and properties. They are commonly used for digital art, collectibles, and other unique digital items.

Estimated Tax Payments: These are periodic payments made towards expected tax liability for the year, typically by those who do not have taxes withheld from their earnings, such as self-employed individuals or investors. These payments are made quarterly in the U.S., and help avoid underpayment penalties.

ETF (Exchange-Traded Fund): An ETF is a type of investment fund and exchange-traded product, i.e., they are traded on stock exchanges. ETFs are similar to mutual funds but are listed on exchanges, and ETF shares trade throughout the day just like ordinary stock.

Ethereum: A decentralized, open-source blockchain system that features smart contract functionality. Ethereum is the blockchain on which Ether (ETH), its native cryptocurrency, is traded. It's known for its versatility and ability to execute complex operations, making it a popular platform for decentralized applications.

Ethereum Classic: This is a continuation of the original Ethereum blockchain following a split, or "hard fork," in 2016. The fork was in response to a major hack, and Ethereum Classic runs the original blockchain, maintaining the untampered history free from external interference.

Ethereum Virtual Machine (EVM): The EVM is the runtime environment for smart contracts in Ethereum. It's a powerful, sandboxed virtual stack embedded within each full Ethereum node, responsible for executing contract bytecode. Contracts are written in high-level languages, like Solidity, then compiled to EVM bytecode.

Examination: In the context of taxation, an examination (or audit) is the review of a taxpayer's accounts and financial information by the IRS or other tax authorities to ensure that income and expenses are reported accurately and comply with tax laws.

Exchange: This term has multiple meanings. In finance, it refers to a marketplace where securities, commodities, derivatives, and other financial instruments are traded. In cryptocurrency, a crypto exchange is a platform where digital currencies are traded.

Excise Taxes: These are taxes paid when purchases are made on a specific good, such as gasoline or tobacco. Excise taxes are often included in the price of the product and may also be levied on activities, such as wagering or on highway usage by trucks.

Fakeout: In trading, a fakeout is a false breakout that occurs when the price of a security or an index briefly moves above a resistance level or below a support level but then reverts, misleading traders who acted on the breakout signal.

Falling Knife: A term used in the investment world to describe a rapidly declining stock or market. The phrase implies danger in attempting to 'catch' the stock, as one might get hurt, similar to catching a literal falling knife.

Fan Tokens: These types of cryptocurrency allow holders to vote on mostly minor decisions related to their clubs. Popular in sports franchises, these tokens provide a new way to engage with a favorite team, offering fans some influence and access to exclusive experiences.

Fear Of Missing Out (FOMO): FOMO refers to the anxious feeling investors get of missing out on a potentially profitable investment or trading opportunity in finance and investing. It can often lead to making hasty decisions without thorough analysis.

Fear, Uncertainty, and Doubt (FUD): A term used to describe a strategy of spreading harmful, misleading, or false information about something, thereby creating a sentiment of fear and uncertainty among investors or the public.

Fiat: In finance, fiat money is a currency not backed by any physical commodity but rather by the government that issued it. Unlike cryptocurrencies or gold-backed money, its value is derived from the relationship between supply and demand.

FICA Taxes: These are taxes levied on both employees and employers to fund Social Security and Medicare in the United States. FICA stands for Federal Insurance Contributions Act and represents a payroll tax that is deducted from an employee's paycheck.

Field Audit: A more comprehensive type of tax audit conducted by the IRS. Unlike a desk audit, a field audit involves an IRS agent visiting the taxpayer's place of business or home to examine records and conduct a thorough investigation into the taxpayer’s financial affairs.

Filing Status: In tax terms, this refers to a category that defines the type of tax return form a taxpayer must use. Filing status is influenced by marital status and family situation and determines the rate at which income is taxed.

Finality: In blockchain technology, finality refers to the point at which transactions are considered irreversible and permanently part of the blockchain. Once achieved, a transaction cannot be altered, reversed, or canceled.

First Notice: This typically refers to the initial correspondence sent by the IRS or other tax authorities to a taxpayer, indicating a discrepancy or issue with a tax return that needs to be addressed or resolved.

Fiscal Policy: This government policy influences an economy by adjusting spending levels and tax rates. Fiscal policy is used to manage economic cycles, control inflation, stimulate economic growth, or reduce unemployment.

Fiscal Tax Year: In taxation, a fiscal tax year is any 12-month period that ends on the last day of any month other than December. Corporations, partnerships, and other entities can choose a fiscal tax year instead of a calendar tax year.

Flippening: A term used in the cryptocurrency community to refer to the hypothetical moment when Ethereum (ETH) overtakes Bitcoin (BTC) as the biggest cryptocurrency by market capitalization.

Foreign Tax Credit: A nonrefundable tax credit for income taxes paid to a foreign government as a result of foreign income tax withholdings. The foreign tax credit is available to anyone who either works in a foreign country or has investment income from a foreign source.

Forex (FX): Short for foreign exchange, Forex is the market in which currencies are traded. It's the largest and most liquid market in the world, with trillions of dollars traded daily.

Fork: In cryptocurrency, a fork occurs when there is a change to the software of a digital currency that creates two separate versions of the blockchain with a shared history. A fork can be 'hard,' creating a new currency, or 'soft,' resulting in a new version of the cryptocurrency.

Form: In the context of taxation, a form is an official document used for filing or reporting financial information. The IRS and other tax authorities provide various forms for different tax-related purposes.

Full Node: In a blockchain network, a full node is a computer that fully enforces all the rules of the blockchain. It maintains a complete and up-to-date copy of the blockchain and participates in validating transactions and blocks.

Fundamental Analysis (FA): This is a method of measuring a security's intrinsic value by examining related economic and financial factors. In the context of stocks, FA looks at conditions like a company's earnings and expenses; in crypto, it may involve the underlying technology and user adoption.

Fundamentals: In finance and investing, fundamentals refer to the basic financial and economic factors that influence the value of an asset, such as earnings, revenue, profit margins, and growth potential.

Fungibility: Fungibility is the property of a good or asset where each unit is interchangeable and indistinguishable from another of the same asset. For example, one dollar is fungible with another dollar, and one Bitcoin is fungible with another Bitcoin.

FUTA Taxes: The Federal Unemployment Tax Act (FUTA) is a payroll tax paid by employers to fund the federal government's unemployment account, which provides funds to states for unemployment benefits.

Futures Contract: A futures contract is a standardized legal agreement to buy or sell a specific commodity or financial instrument at a predetermined price at a specified time. Futures are used for hedging or investment purposes.

Hard Fork: A significant change to a blockchain's protocol, creating a permanent divergence from the previous version of the blockchain, often resulting in a new chain and a new coin.

Halving: This event occurs when the reward for mining new Bitcoin blocks is halved, thereby reducing the rate at which new coins are created. This occurs approximately every four years for Bitcoin, and it is programmed into the algorithm.

Hash: A function that converts an input of letters and numbers into an encrypted output of a fixed length. In cryptocurrencies, a hash is used to secure transactions and control the creation of new coins.

Hash Rate: The measure of computational power per second used when mining. A higher hash rate increases the chances of finding the next block and receiving the mining reward.

High-Frequency Trading (HFT): This is a type of financial trading that uses powerful computer programs to transact a large number of orders at extremely high speeds. It uses complex algorithms to analyze multiple markets and execute orders based on market conditions.

Hobby: In tax terms, a hobby is an activity not pursued for profit. Hobby expenses cannot be deducted like business expenses, and hobby income is taxed differently than business income.

HODL: Originating from a misspelling of "hold," HODL has become a term used in the cryptocurrency community to describe a strategy of holding onto a cryptocurrency rather than selling it, typically through periods of volatility.

House of Representatives: The lower chamber of the United States Congress, made up of representatives elected from each U.S. state, with representation based on the state's population.

House Ways and Means Committee: A committee of the U.S. House of Representatives responsible for taxation, tariffs, and other revenue-raising measures.

Job-Related Expenses: Expenses that are necessary for your job and not reimbursed by your employer. These include travel expenses, professional dues, work-related education, and uniforms. Many job-related expenses are no longer deductible under recent tax law changes.

Latency: In technology and finance, latency refers to the delay between a request and a response. In the context of blockchain and trading, it's the time taken for a transaction to be executed and then recorded on the blockchain.

Layer 1: Layer 1 refers to the main network in a blockchain protocol, where all on-chain transactions are executed. It represents the foundational layer of the blockchain architecture. Cryptocurrencies like Bitcoin, Ethereum, and Solana not only function as digital currencies but also serve as Layer 1 networks, providing the base framework for their respective blockchain ecosystems.

Layer 2: This term refers to a secondary framework or protocol built on top of an existing blockchain system. The main goal of these protocols is to solve the transaction speed and scaling issues for the main blockchain (Layer 1).

Ledger: In finance, a ledger is a book or other collection of financial accounts. In the context of cryptocurrencies, a ledger is a digital record of transactions. The blockchain itself is a type of distributed ledger.

Legislative Grace: This principle in U.S. tax law states that all tax deductions and credits are a matter of "legislative grace." No taxpayer is entitled to a deduction or credit unless specifically granted by law.

Leverage: In finance, leverage is the use of borrowed funds to increase one's trading position beyond what would be available from one's cash balance alone. Leverage can amplify both gains and losses.

Leveraged Tokens: These are crypto tokens that offer leveraged exposure to the price of an underlying asset. They allow holders to potentially increase their returns but with a higher risk than holding the underlying asset directly.

Lightning Network: A "Layer 2" payment protocol layered on top of a blockchain-based cryptocurrency (like Bitcoin). It's designed to enable fast, scalable transactions among participating nodes and is used for micropayments.

Like-Kind Exchange: Under U.S. tax law, a like-kind exchange allows for the exchange of similar types of property without immediate tax liability. This can defer capital gains taxes as long as the rules of the exchange are followed.

Liquid Staking: Liquid staking is where users stake their cryptocurrency tokens in a proof-of-stake blockchain network but retain the liquidity of their assets. Unlike traditional staking, where staked assets are locked and cannot be used until they are unstaked, liquid staking involves receiving a tradable derivative token in exchange for the staked asset. This derivative token represents the staked position and can often be used elsewhere in the DeFi ecosystem for activities like lending, borrowing, or trading, providing liquidity while still earning staking rewards.

Liquidation: In financial terms, liquidation refers to converting assets into cash. In the context of trading, it can also mean closing a position when a margin call is not met or when profits are taken.

Liquidity: This refers to the ease with which an asset or security can be converted into cash without affecting its market price. High liquidity is generally associated with a high volume of trading in that asset or security.

Liquidity Pool: A liquidity pool is a collection of funds locked in a smart contract on a DeFi platform. It enables decentralized trading, lending, and other functions by providing the necessary liquidity. Users, known as liquidity providers, add funds to these pools and, in return, earn fees from the transactions that occur within the pool.

Liquidity Pool Tokens (LP Tokens): When users contribute assets to a liquidity pool, they receive liquidity pool tokens (LP tokens) in return. These tokens represent the user's share of the pool and can be used to reclaim their proportion of the pool's assets, along with a portion of the transaction fees, when they decide to withdraw their liquidity.

Liquidity Provider: In financial markets and DeFi (Decentralized Finance), a liquidity provider is an individual or entity that contributes assets to a liquidity pool to facilitate trading on the platform and earns passive income on their deposit.

Listing: In finance, this refers to the company’s shares being on the list of stocks that are officially traded on a stock exchange. In the context of cryptocurrencies, it refers to a crypto coin or token being added to an exchange.

National Research Program: Run by the IRS, this program involves detailed audits of random samples of tax returns to collect data on taxpayer compliance. The findings help improve the efficiency and effectiveness of IRS enforcement.

Net Investment Income Tax (NIIT): A tax of 3.8% on certain net investment income of individuals, estates, and trusts that have income above statutory threshold amounts.

Net Operating Loss (NOL): An NOL occurs when a company's allowable tax deductions are greater than its taxable income within a tax period. NOLs can generally be used to offset future tax payments, which reduces future tax liabilities.

NFT Floor Prices: The lowest price at which an NFT can be purchased in a particular collection. It's an indicator of the minimum entry price for an investor interested in purchasing an NFT from that collection.

NGMI: An acronym in the crypto community for "Not Going to Make It." It’s often used to describe a pessimistic outlook on an investment or a lack of belief in the long-term success of a particular cryptocurrency or project.

Ninety-Day Letter: Officially known as the Statutory Notice of Deficiency, this IRS letter gives the taxpayer 90 days to either agree or appeal the IRS's proposed adjustments to their tax return. It's a formal legal notice.

No Change Letter: A letter from the IRS stating that after an audit, they have found no issues and made no changes to the tax return.

Node: In blockchain, a node is a computer connected to the blockchain network that uses a client to validate and relay transactions.

Non-Cash Charitable Contributions: These are donations of physical items rather than money to a qualified charitable organization. Examples include clothing, furniture, electronics, or other tangible property. The value of these items can often be deducted from the donor's tax return.

Non-Community Property: In marriage and property law, non-community property refers to assets owned separately by either spouse, typically acquired before marriage, or received individually as a gift or inheritance.

Non-fungible Token (NFT): An NFT is a unique digital asset that uses blockchain technology to represent ownership of a specific item or piece of content. Unlike cryptocurrencies like Bitcoin or Ethereum, each NFT is distinct and cannot be exchanged on a like-for-like basis.

Non-Refundable Credit: A tax credit that can only reduce a taxpayer's liability to zero. Any portion of the credit that exceeds the taxpayer's liability is not refunded. Examples include child and dependent care credits and education credits.

Nonce: In blockchain technology, a nonce is a number that blockchain miners are solving for. It refers to a number added to a hashed or encrypted block that, when rehashed, meets the difficulty level restrictions of the target blockchain.

Notice: In taxation, a notice is an official letter from the IRS or other tax authorities that informs the taxpayer about an issue with their account or tax return. It can range from a simple notification of changes to a request for payment.

Notice of Deficiency (NOD): An IRS notice sent to taxpayers to inform them of a discrepancy in their tax return and the intention to assess additional tax. It provides the taxpayer with a 90-day period to file a petition with the Tax Court to challenge the proposed changes.

Paid Preparer: This refers to a professional who is compensated for preparing all or a substantial portion of a tax return or claim for a refund. Paid preparers are often required to sign the tax return and include their Preparer Tax Identification Number (PTIN).

Paper Hands: A term used in the investment and cryptocurrency communities, referring to investors who sell their holdings too early in response to a drop in price or under the pressure of market volatility, often perceived as having a lack of conviction or resilience.

Paper Wallet: In the context of cryptocurrencies, a paper wallet is a way of storing crypto coins offline as a physical document. It typically includes printed QR codes representing the public and private keys of a wallet.

Partial Payment Installment Agreement: A tax payment option provided by the IRS that allows taxpayers to make smaller monthly payments toward their tax debt. The total amount paid over time may be less than the total amount of tax owed.

Partnership: A business entity formed between two or more individuals who share management and profits. The federal government recognizes several types of partnerships: General Partnerships, Limited Partnerships, Limited Liability Partnerships (LLP), and Limited Liability Limited Partnerships (LLLP).

Partnership Return: A tax document (IRS Form 1065) that partnerships must file. It reports the income, deductions, gains, losses, etc., of the partnership but does not pay taxes. The profits and losses are passed through to the partners.

Pass-Through Entity: A business entity that does not pay income taxes at the corporate level. Instead, its income is "passed through" to its owners or partners, who then report and pay taxes on the income through their individual tax returns.

Payment: In general, a payment is the transfer of money, goods, or services from one party to another as compensation or in exchange for something. In tax terms, it refers to the transfer of money to satisfy a tax liability.

Peer-to-Peer (P2P): A decentralized model of interactions between parties in a distributed network, where participants interact directly without the need for intermediaries. In finance, P2P commonly refers to lending, transactions, or file sharing.

Pegged Currency: A currency whose value is tied to another currency, group of currencies, or another measure of value, like gold. A currency peg stabilizes the exchange rate between countries.

Penalty: In taxation, a penalty is a financial punishment imposed by the IRS or other tax authorities for not complying with tax laws, such as late filing or payment, or for inaccuracies in a tax return.

Penalty Abatement: A provision that allows taxpayers to request a reduction or removal of penalties applied by the IRS for reasons such as failing to file or pay taxes on time, provided they have a reasonable cause or meet other criteria set by the IRS.

Pepe: Originally an internet meme featuring a green frog character, which has been adopted in various contexts within internet culture, including occasionally in cryptocurrency and meme coin communities.

Permissionless Blockchain: A type of blockchain where anyone can participate without needing approval from a governing body. Examples include Bitcoin and Ethereum, where anyone can join the network, validate transactions, and create new blocks.

PFP (Profile Picture): Commonly used in social media and online contexts, it refers to the display image used on one's profile. In the crypto space, PFPs are often associated with unique digital avatars or NFTs.

Phase Out: In finance and taxation, this refers to the gradual reduction or elimination of a benefit as income rises. It often applies to tax credits, deductions, and exemptions, which decrease as a taxpayer’s income increases to a certain threshold.

Plasma: A proposed framework for scaling Ethereum’s capacity for handling transactions. It involves creating smaller, individual blockchains (child chains) linked to the main Ethereum blockchain, reducing the strain on the main chain.

Ponzi Scheme: A form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity, and they are unaware that other investors are the source of funds.

Power of Attorney (POA): A legal document that allows an individual to appoint someone else to manage their affairs if they are unable to do so. In tax matters, a POA allows someone to represent the taxpayer before the IRS and handle tax-related matters.

Pre-trial Conference: In the context of legal proceedings, including tax disputes, a pre-trial conference is a meeting of the parties involved in a case conducted prior to the trial. The purpose is to plan the trial and discuss issues like settlement possibilities.

Price Action: This term refers to the movement of a security's price plotted over time. Price action is the basis of all technical analysis of a stock, commodity, or other asset chart.

Prisoner's Dilemma: A standard example of a game analyzed in game theory that shows why two completely rational individuals might not cooperate, even if it appears that it is in their best interests to do so.

Private Key: In cryptography and cryptocurrency, a private key is a secret number that allows bitcoins to be spent. Each Bitcoin wallet contains one or more private keys, which are saved in the wallet file.

Proof of Reserves (PoR): In cryptocurrency, this is an audit mechanism designed to prove that a service (like a crypto exchange) holds the reserves it claims to, offering transparency and proof of solvency.

Proof of Stake (PoS): A type of consensus mechanism used by blockchain networks to achieve distributed consensus. It requires users to stake their tokens as collateral to validate transactions. It's seen as more energy-efficient compared to Proof of Work.

Proof of Staked Authority (PoSA): A consensus mechanism that combines elements of Proof of Stake and Proof of Authority. Validators stake their tokens and are chosen to create blocks based on their stake and reputation.

Proof of Work (PoW): A consensus algorithm in a blockchain network where miners solve complex mathematical puzzles to validate transactions and create new blocks. Bitcoin is the most well-known implementation of PoW.

Proposed Regulations: Preliminary rules and guidelines issued by government agencies for public feedback before they are finalized. They provide an interpretation and intended implementation of laws.

Proposer-Builder Separation (PBS): A proposal in blockchain technology that separates the roles of proposing blocks and building block content. This aims to improve censorship resistance and decentralization in block creation.

Proto-Danksharding: A term related to Ethereum’s planned scaling solutions. It's a preliminary step towards implementing Danksharding, which is a more comprehensive sharding proposal aimed at greatly increasing Ethereum's capacity.

PTIN (Preparer Tax Identification Number): A number that all paid tax return preparers must use on U.S. federal tax returns or claims for refund submitted to the IRS. It's used to identify the preparers of the return and maintain their privacy.

Pumpamentals: A term used in the cryptocurrency community, humorously or critically, to refer to aspects of a cryptocurrency that might encourage buying and price increases without solid underlying fundamentals.

Puts: In options trading, a put option is a contract giving the buyer the right, but not the obligation, to sell a stock or other asset at a specified price within a specific time period.

Real Estate Investment Trusts (REITs): REITs are companies that own, operate, or finance income-generating real estate across a range of property sectors. They offer a way for individuals to invest in large-scale, income-producing real estate.

Real World Assets (RWAs): In finance, RWAs are physical or tangible assets used as collateral or backing for financial products. In the context of DeFi (Decentralized Finance), it refers to the integration of traditional, tangible assets into the blockchain ecosystem.

Refund: In taxation, a refund is the return of excess amounts of that a taxpayer has paid to the state or federal government throughout the year.

Refundable Credit: A tax credit that can reduce one’s tax liability to below zero, resulting in a refund. Examples include the Earned Income Tax Credit (EITC) and the Child Tax Credit, where if the credit is larger than the amount of taxes owed, the excess amount is refunded to the taxpayer.

Regulations: Official rules issued by government agencies to interpret and implement laws passed by legislatures, providing detailed guidelines for compliance and enforcement. Tax regulations interpret and supplement the Internal Revenue Code.

Rekt: A slang term in cryptocurrency culture derived from "wrecked," signifying a significant financial loss, often due to a bad trade or investment.

Relative Strength Index (RSI): A indicator of the momentum in an asset’s price movement used in technical analysis. This measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset.

Resistance: In technical analysis, resistance is a price level where selling pressure is strong enough to prevent the price from rising further. The rationale is that as the price approaches resistance, more sellers will sell, and buyers will become less willing to buy.

Return on Investment (ROI): A financial metric used to measure the profit from an investment. It is calculated by dividing the profit (or gain) of an investment by the cost; the result is expressed as a percentage.

Revenue Agent (RA): In the IRS, a revenue agent specializes in tax audits of businesses and complex individual tax returns.

Revenue Procedure: An official statement of a procedure published by the IRS that affects the rights or duties of taxpayers or other members of the public under the law in order to assist them in complying with such laws.

Revenue Ruling: An interpretation by the U.S. Internal Revenue Service regarding the application of tax laws. It provides guidance and clarification on specific tax matters or IRS laws.

Rug Pull: In cryptocurrency, a rug pull is a type of scam where developers abandon a project and take their investors' funds. It is typically associated with DeFi projects and new cryptocurrencies.

Taker: In financial markets, a taker is a trader who removes liquidity from the order book by immediately placing an order that matches an existing order on the book. Taker fees are usually higher than maker fees due to the immediate nature of trade.

Tank: In financial slang, to 'tank' means to rapidly decline in value. It's often used to describe a situation where the price of a stock or a market is falling sharply.

Taproot: Taproot is a significant upgrade to the Bitcoin blockchain, implemented to enhance the blockchain's scalability, efficiency, and privacy. It introduces a new script type that makes complex transactions indistinguishable from standard transactions on the blockchain, improving both privacy and efficiency.

Tax Bracket: A range of incomes taxed at a specific rate. Tax brackets result in a progressive tax system, where tax rates increase as income increases. There are several tax brackets, each with its own tax rate, in the U.S. tax system.

Tax Court: The United States Tax Court is a federal court that hears and adjudicates tax-related disputes and issues, including disputes over income tax, estate tax, and gift tax, among others, before they are assessed by the Internal Revenue Service.

Tax Court Petition: A legal document filed by a taxpayer to dispute the IRS's assessment. Filing a petition starts the litigation process in the U.S. Tax Court. It is used when a taxpayer disagrees with the IRS over income tax, penalties, etc.

Tax Identification Number (TIN): A tax identification number is a number used by the IRS in the administration of tax laws. It is issued either by the Social Security Administration or by the IRS. A TIN can be a Social Security Number (SSN), Employer Identification Number (EIN), or Individual Taxpayer Identification Number (ITIN).

Tax Loss: A loss that results from holding an asset that has decreased in value compared to its purchase price and is realized when the asset is sold. This loss can be used to offset capital gains for tax purposes.

Tax Loss Harvesting: A strategy in which investors sell securities at a loss to offset a capital gains tax liability. It is used to reduce tax liability by offsetting realized capital gains with realized capital losses.

Tax Return: A form(s) filed with a state or federal tax authority that reports income, expenses, and other relevant tax information. Tax returns are used by taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes.

Tax Year: The period for which tax is calculated. In the U.S., the individual tax year is usually the same as the calendar year, running from January 1 to December 31. However, businesses can have a different fiscal year.

Taxable Income: This is the portion of your total income used to calculate how much tax you owe in a given tax year. It's generally your gross income minus any deductions or exemptions allowed in that tax year.

Taxpayer Advocate Service (TAS): An independent organization within the IRS that helps taxpayers resolve problems with the IRS and recommends changes to prevent future problems.

Taxpayer Bill of Rights: A document that outlines the fundamental rights of taxpayers when dealing with the IRS. These rights include the right to be informed, the right to quality service, and the right to challenge the IRS’s position, among others.

Technical Analysis: The study of historical market data, including price and volume, to predict future market behavior. It is widely used in the trading of financial assets like stocks, bonds, and cryptocurrencies.

Ticker: A unique series of letters assigned to a security or asset for trading purposes. In stock markets, it's an abbreviation used to uniquely identify publicly traded shares of a particular stock. In cryptocurrency, it's the abbreviation used to identify cryptocurrencies (e.g., BTC for Bitcoin, ETH for Ethereum).

Token: In the context of blockchain and cryptocurrencies, a token is a type of cryptocurrency that represents an asset or specific use and resides on its blockchain. Tokens can be used for investment purposes, to store value, or to make purchases.

Token Lockup: A period during which tokens cannot be sold or transferred. Lockup periods are often used in initial coin offerings (ICOs) or token sales to ensure stability in the token’s early days and to align the long-term interests of developers and investors.

Token Sale: An event in which a new cryptocurrency project sells part of its cryptocurrency tokens to early adopters and enthusiasts in exchange for funding. This is often used to raise capital for the development of a new coin, app, or service.

Token Standards: These are sets of common rules and definitions that apply to tokens within a particular blockchain. Standards ensure compatibility between different tokens and platforms. Examples include ERC-20 and ERC-721 on the Ethereum blockchain.

Tokenomics: A portmanteau of “token” and “economics,” tokenomics refers to studying the economics of cryptocurrencies or tokens. It includes considerations like token distribution, supply, demand, incentives, and other factors that could impact a token’s value.

Total Supply: In cryptocurrency, this refers to the total number of coins or tokens that currently exist, minus any coins that have been verifiably burned. It's different from circulating supply, which excludes tokens locked or reserved.

Total Value Locked (TVL): In the context of DeFi, TVL represents the total capital held within the DeFi protocols. It's a measure of the overall health and growth of the DeFi space.

TradFi: Short for traditional finance, referring to the conventional financial system and institutions such as banks, insurance companies, and the stock market, as opposed to the emerging DeFi sector.

Transaction ID (TXID): A unique string of characters that identifies a transaction on a blockchain. This ID can be used to look up and verify the transaction details, including the sender, receiver, and amount transferred.

Transactions Per Second (TPS): A measure of the number of transactions a blockchain network can process each second. Higher TPS indicates a more scalable network, which is a key factor in the usability of a cryptocurrency.

Treasury Department: In the United States, the Department of the Treasury is the national treasury and finance department, which manages federal finances, collects taxes, mints coins, and prints paper money.

TrueUSD (TUSD): TrueUSD is a stablecoin that is pegged to the US dollar. It’s a fully collateralized, legally protected, and transparently verified cryptocurrency that aims to offer the advantages of using cryptocurrencies without the volatility typically associated with them.

Trustless: In blockchain and cryptocurrency, a trustless system is one where transactions and interactions can occur without the need for trust or a central authority. This is due to the cryptographic, algorithmic protocols governing the system.

Turing Complete: A system is Turing complete if it can perform any computation that a Turing machine can, given an appropriate algorithm and the necessary time and memory. In blockchain, a Turing complete blockchain can execute complex contracts and computations.

Value Added Tax (VAT): This tax is similar to sales and use taxes. It is a tax placed on the consumption of a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed.

Virtual Machine: A virtual machine is a software emulation of a computer system. They provide the functionality needed to execute entire operating systems. In blockchain, Ethereum's Virtual Machine (EVM) enables the smart contracts to be executed on the Ethereum network.

Vitalik Buterin: He is a co-founder of Ethereum, which is a decentralized platform that runs smart contracts. Buterin has been involved in the Bitcoin community since 2011, and he has contributed to Bitcoin both as a writer and a developer.

Volatility: In financial markets, volatility refers to the degree of variation of a trading price series over time. It is often measured by the standard deviation of returns. In cryptocurrency, volatility typically refers to the frequent and significant price changes over short periods.

Volume: In financial markets, volume refers to the amount of a particular asset or security that is traded over a given period. It is an important indicator of the strength or weakness of a market trend.

Zero-Knowledge Proofs: A cryptographic method where one party can convince another that they know a specific piece of information (value x) without revealing any details of that information. This concept is broad and foundational in cryptography, used in various applications to enhance privacy and security by enabling proof without disclosure.

Zk-rollup: A type of blockchain scaling solution. Zk-rollups bundle (or "roll up") hundreds of transfers into a single transaction, using zero-knowledge proofs to maintain data integrity. This significantly reduces the strain on the network, allowing for more scalability.

Zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge): A refined type of Zero-Knowledge Proof notable for its efficiency and non-interactive process. Zk-SNARKs compress the proof process, making verification swift and straightforward without needing back-and-forth communication between the prover and verifier. They are particularly significant in blockchain contexts, such as in privacy-centric cryptocurrencies, where they provide a means to validate transactions securely and privately without revealing the transaction's content.

Zk-STARKs (Zero-Knowledge Scalable Transparent Arguments of Knowledge): Similar to zk-SNARKs, zk-STARKs are a cryptographic-proof technology that is more scalable and does not require a trusted setup, enhancing both security and privacy.