For bitcoin users, the taxman cometh. And you best know how to calculate taxes owed on what the IRS calls convertible virtual currency.

In March 2014, the IRS issued Notice 2014-21, which declares virtual currency will be treated as property for federal tax purposes. Here's the takeaway:

Payment to employees in virtual currency is taxable, subject to federal income tax withholding and payroll taxes, and employers must provide a Form W-2.

Independent contractors paid in virtual currency also must pay taxes and self-employment tax rules apply. Clients paying the contractors must issue a Form 1099.

The type of gain or loss from the sale or exchange of virtual currency depends on whether it's a capital asset to the taxpayer. Stocks, bonds, or other investment property are typical capital assets. Taxpayers incur ordinary gains and losses on the sale or exchange of virtual currency that is not a capital asset, such as inventory and other property held for sale to customers in a business or trade.

Payments in virtual currency are subject to the same information reporting as with any other payments made in property.

Failing to comply with tax laws, underpayments of taxes on virtual currency transactions, and incorrect or late reporting of the transactions may lead to penalties.

The IRS refers to bitcoin as convertible virtual currency because it has an equivalent value in real currency or can be substituted for real currency. It can be purchased for or exchanged into U.S. dollars, euros and other real or virtual currencies.

Enter LibraTax, which PCWorld in August declared the first tax prep tool to support bitcoin.

But this isn't a tax prep program akin to TurboTax. It's a cloud-based tool that scans the public ledgers, called "block chains", that record bitcoin transfers between accounts. (Transactions are anonymous because two account holders can exchange bitcoins without bank or governmental verification.)

LibraTax retrieves the user's transaction history from the block chain and synchronizes it with its fair market value. Users can choose not to reveal their bitcoin addresses to the service, company founder Jake Benson told PCWorld. They can remain anonymous by uploading a spreadsheet of their transactions with no public address or use a throwaway email address.

Benson, CEO of Libra Services Inc. (the parent of LibraTax), says in his bio on the company website that he launched the service "because the onus of being a good citizen and a responsible taxpayer can be especially burdensome for digital currency holders right now given the confusion over how to define digital currency."

The company also expects to launch products targeting businesses' need to track sales and payroll tax for digital currencies.

According to PCWorld, the LibraTax tool is free until it officially launches sometime this month. A premium version is expected and tax professionals and CPAs can subscribe to additional plans.

The LibraTax website also offers an affiliate program that matches bitcoin users with tax professionals.