Payment channels on Bitcoin that let two parties transact off-chain, opened and closed with on-chain transactions.
Opening a channel locks your own BTC: a transfer, not a disposal. Payments sent through channels are disposals of the BTC sent, at value; routing fees earned by a node operator are income. Closing a channel returns your balance, again a transfer. Records have to capture off-chain payments, which no explorer shows.
Yes. Each payment is a disposal of the BTC sent, like any other spend. Opening and closing channels is not.
Source: IRS Notice 2014-21
Last reviewed September 18, 2026. Tax rules change; confirm current law before acting.
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