VeriFund is simply a fund that swings back and forth from VRC to BTC. It does not fall under US tax code as there is never any conversion to FIAT and thus is just one property trading for another.
If that's true, then Bittrex wouldn't have to pay any taxes under the US tax code either. Until they convert to fiat you mean. But something still seems to be missing as that would mean you could operate a non-fiat exchange and never report a profit until you exchange to fiat.
VeriFund doesn't sell to fiat, it just pays bounties. Bittrex takes fees and pays people.
The IRS has not given any guidance whether trading BTC for altcoin is considered "same kind" or "different kind" property. But some people are paying the capital gains on their altcoin trades to be on the safe side. The problem here is if the IRS says, "Altcoin is considered different properties." Now all of a sudden every single BTC purchased by VeriFund is a taxable event. That's what I'm worried about.
I'm curious how Bittrex deals with this. I'll ask them and see how they answer.
US tax code is unclear in this area. I'm sure that the IRS will interpret the tax code in their favor, but it will remain unclear until the issue comes before a court or the tax code is rewritten.