The Internet reported that the U.S. Internal Revenue Service (IRS) stated in a lawsuit that pledging cryptocurrencies should create tax obligations immediately after completion. The IRS dismissed a lawsuit filed by cryptocurrency investor Joshua Jarrett in the U.S. District Court for the Central District of Tennessee. The lawsuit involves the tax treatment of pledges, a process that generates new tokens by using existing tokens and computing power to verify currency transactions. In a December 20 response, the IRS denied that pledges would create new property and argued that taxpayers (Jarrett) should pay taxes on the value of the tokens when they receive tokens rewarded by the pledge.