Bitcoin Forum

With tax day fast approaching in the United States, the subject of Bitcoin and taxation has been all over the news lately.

Over the past several years, Bitcoin miners, investors and startups have enjoyed a huge financial boon from the Bitcoin price explosion.  As Bitcoiners, are we required to cough up real money to the IRS?

According to the US Government, we owe the IRS some cash.  Profits from Bitcoin mining are taxable and profits from Bitcoin investments fall under the capital gains tax.  Yes, we owe the government money. But should we pay?

No, I don't think so.

The power to tax is the power to destroy.  The Federal Reserve banking cartel understands the danger of Bitcoin eventually eclipsing fiat currency.  They are, frankly, terrified.  The US hasn't banned Bitcoin because it is not yet in mainstream usage.  Stores don't accept Bitcoin. Most people don't own Bitcoin.  Bitcoin might have entered the public lexicon, but it hasn't entered the public wallet.  At least not yet.

But the IRS and the Federal Reserve would love to establish a precedent of taxation for Bitcoin.  Should they eventually feel threatened enough to severely restrict it, they could easily tax Bitcoin into oblivion. 

Already the government is seeking to regulate Bitcoin as a monetary instrument, hence the recent arrests of LocalBitcoin exchangers in Florida and the indictment of Charlie Shrem.  By regulating Bitcoin, they ensure that the large Bitcoin companies (CoinBase, etc) will enjoy a monopoly, becoming extremely vulnerable to government regulation and taxation. Small players will be forced out of business and new players will have a hard time getting into the game.  This has always been the model for banking in the United States and they are applying the same restrictive template to Bitcoin. 

The government doesn't need to ban Bitcoin. All they need to do is impose taxes and regulation sufficient to keep the big Bitcoin companies on top, and the little guys out of the game.

My name is Dr. Michael Moriarty, and I own the Bitcoin Network of 50+ Bitcoin related sites, including https://BitPlastic.com, https://CoinChimp.com, https://BitLaunder.com and many more.  We are not going to pay 1 cent to the IRS or any other government agency.  Nor do we verify the identity of our customers.  Nor do we report our customer's financial transactions to any government agency whatsoever.

The beauty of Bitcoin is that the average person can use it to escape from the fiat currency ponzi scheme that characterizes our modern banking system.  By reporting your Bitcoin earnings to the IRS, you are implicitly embracing their financial scam and becoming part of it.

Beverely Rubik says 'you can recognize a pioneer by the arrows in his back.'  Maybe the IRS will put some arrows in my back, but they will have to find me first :-)

Lol...I stopped reading after the first sentence.  Tax day has come and gone already.  Today is the 16th of April!

pro make invoice ... invoice have tax.
so, what is the problem ?

the problem is the bank ... when people realize that his economy is more safe in bitcoin than in the bank.

Have fun in jail!

It doesn't matter if you own a pizza palor, mine bitcoins, or sell drugs.

You always owe taxes!

Why don't you move to a country where there are no capital gains tax and no income tax.

As long as you live in the US or are an US citizen you will be breaking the law and the IRS will catch up with you.

The first thing that happens after you file your tax return is that the IRS computer automatically checks it for mathematical and demographic accuracy.  If the return was submitted in proper form and appears to be error free, then the IRS accepts it and begins to process your refund or generate a bill for any tax due

The IRS has no legal authority in my domain. I do not recognize them.

Seems like the pro-tax argument always amounts to the threat of being put in a cage. That's called "extortion". Taxes = Extortion. Get it?

Is Bitplastic still operating? I read in a couple of places that it is a confirmed scam.

I own a pizza parlor that sells cocaine-covered pizza, in our basement is a server farm mining Bitcoins. We've got guns. Lots of guns. We've also got solid communication and high-tech security.

We haven't paid taxes since 1989. We've got the right friends. Whatcha gonna do?

https://i.imgur.com/csMB7.gif

Plenty of cash only businesses under-report their earnings. Some get caught, many don't. If you know the tools that the IRS uses to catch these types of tax evaders (I do) it would be easy to keep your BTC-to-cash transactions under the radar and get away with this indefinitely. Even with a random audit. However, if the IRS for some reason or other opens a criminal investigation on you then it is a different story ...

Yes, but I doubt the OP is running a cash-only business with which he can use to launder his money.

The second he sells $5k worth of coins on Coinbase, wires in $5k from a sale on Bitstamp, deposits a check for $5k from CampBX, or $5k in cash from sales he made on localbitcoins, his bank is likely secretly filling out forms and reporting him. They won't tell him and in fact, they are not allowed to. Try to break up the deposits into smaller amounts and you'll be charged with structuring, which is a much more serious crime. I suppose you could use localbitcoins and keep it all in cash and spend it slowly. Try doing that with $100k+ though without attracting any suspicions. You become very limited with what you can do with your money. Fancy dinners are probably ok. Jewelry and sports cars are not.

So, yes, once that money hits your bank account, you run the risk of getting audited. And if you are audited, you'll have to explain it to the IRS. Yes, you can launder it, it happens all the time, and lots of people get away with it. But lots get caught too.

If you made <$5k from your bitcoins then really who gives a sh*t anyways. The IRS isn't going to care about that amount of chump change and frankly, as an honest taxpayer, I don't really care about that amount either.

IRS law IRS6050

Were you all aware that the IRS actually made a rule / law that as long as you are:

*  Under $20,000 in billable transaction income

AND

*  Have fewer than 200 billable transactions ...

Companies like PayPal don't even need to report a 1099?

Think about that. 

You could have $20 million in billable income through paypal and if you have 199 transactions, no 1099.

https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W

Interesting to see how certain rules were put in place that seem to completely violate both common sense, and well-established laws.

I assume the same rule should be applied to Coinbase.

-B-

It appears you're confused as to the meaning of the word "and", so let me help you. "And" means "both of the things". If you only have one of the things, but not the other, that's an "or" situation. Having $20 million in 199 transactions only satisfies the second condition, not the first. That's only one of the things, not both, so you're not meeting the requirements for "and". You need to have both less than $20,000 in transaction income and fewer than 200 transactions to be exempt from the reporting requirements.

That's an off-topic comment for this thread but I'm going to address it since it affects my reputation.

No, BitPlastic is not a scam.  Point me to any forum thread which suggests otherwise and I will address the accuser publicly and attempt to resolve any dispute.

Unfortunately, there are SO MANY scams these days, that just about anyone will scream SCAM if they have the slightest issue with a service.  I respond to customer emails within hours and attempt to do my very best to make everyone happy, but there is always someone who simply cannot be appeased. 

I own 50+ Bitcoin sites and I make plenty of money off fees; I have no interest in scamming anyone, ever.

For what is worth, he used "AND" correctly. However he misinterpreted it

I never agreed to be a US citizen. Trying to tax me, just for being born here, even when I live in another country is straight extortion.

poor you, that you haven't been born in another country like the Ukraine ...

I would move there if they would grant me citizenship for free!

It's not a "pro-tax" argument, it's a statement of fact: get caught and you will go to jail.

The pro-tax argument would be that we, the people and citizenship of the US, collectively decided some time ago that each of us should contribute a small portion of our income and any capital gains to pay for the government and the services it performs.

Renounce your citizenship.

It comes down to a decision, resist injustice, or fund injustice.

Oh, I see, another ignorant US-citizen who doesn't watch the news ...
and btw. Why would anybody give you citizenship for free?
Just renounce your Citizenship like runam0k suggested and you will see, how life is, w/o a citizenship ...

http://www.cnbc.com/id/101406922

More and more people are doing it. The IRS is busy changing the rules to say that they can still come after you, even if you give up your citizenship and move to a more civilised country.

Fine, take a stand, but for as long as you are an American citizen, you necessarily accept there will be consequences if you choose not to pay your taxes and get caught.

I still find it frankly staggering that the IRS still believes it should be taxing people who emigrated, don't live in the US, never visit the US and have no intention of ever returning.

If there were no consequences of resisting injustice, there would likely be no injustice.

The consequences of funding the state are far more serious. If you don't believe me, visit Fallujah, home of American Depleted Uranium, and enjoy the birth defects that your tax dollars helped create. If you are a US tax payer, you are paying the government to spy on you, and so on.

The state is the problem, not the solution.

Well this is 'murica, lets hope other governments have a more positive attitude towards Bitcoin  ;D

Whats if ur bitcoins get stolen from wallet, what do u do then,

I just publicly declared that I didn't pay capital gains taxes and no one has been able to prove otherwise. The IRS, NSA, CIA...none of them have any idea what private keys I have access to.

Keep fear-mongering though, its all you have left.

They will see exactly $0.00 USD from me :-)

You should get some other TLDs then, .com domains are frequently seized by the US.

This is a good point... The french revloution was a lot more than just writing letters and walking down the streets following the path the cops laid out for you.  The seat of power is NEVER given up, ever.

Besides the cost of $450, there is a ton of paperwork involved.

And that doesn't even guarantee success. Most people are denied any attempt to renounce their citizenship unless they are already a citizen of another country. I have a couple of friends that have tried to renounce their citizenship and failed.

It is easy to say "renounce your citizenship", but most people who say that have no idea of the difficulty involved. They are just spewing out words. They may as well say "move to mars".

The issue is becoming moot anyway. I have traveled internationally enough now that I feel safe in just disappearing in a foreign country whenever I am finally ready to do so.

Equally staggering that such people cling on to their US citizenships, no?

The thing is, should anything ever happen to that person - a kidnapping, for example, false imprisonment, civil unrest or war breaking out in a particular country - the very considerable weight and resources of the US government will mobilise to assist that person.  A (paid for) benefit not to be scoffed at.

In any event, it's not all bad for ex-pats: there are various tax rules and exemptions that take into account taxes paid in other countries.  In the UK, for example, income tax is higher than in the US, so there should be no US income tax to pay.

To renounce US citizenship, you go to another country that will take you. Then go to a US consulate and tell them you want to renounce US citizenship. They have you watch a video, they warn you what you're giving up, you sign some forms, they take your passport, and show you out the door. You can no longer enter the US, except maybe on a tourist visa.

From "Office Space":

http://www.imdb.com/title/tt0151804/?ref_=fn_al_tt_1

"Michael Bolton: We get caught laundering money, we're not going to white-collar resort prison. No, no, no. We're going to federal POUND ME IN THE ASS prison."

My $.02.

;)

and where do they send you?   back into the USA?   and how do you travel anywhere else?

Seems straightforward enough.

And............................................................................ .............

You have to have all of your taxes paid up BEFORE you get to drop your US citizenshipo.

Some catch, that Catch 22!

My $.02.

;)

Feel free to take off the Guy Fawkes mask whenever you want...

Old tired tactics of fear & intimidation!

Any organization that uses fear & intimidation to get compliance you can be assured is not rooted in ethics.

And any system that uses force --  when it gets enough power -- always leads to genocide.  Show me one exception!

Such is the case with the current Federal Reserve scam.  Conducting genocide right now around the world to further cement their control.

That's what you're enabling when you let the fear & intimidation that LostDutchman is promoting here get you to comply.

Sad to see that agents who benefit from that system -- such as LostDutchman does in his incorporation biz -- are so willing to spread that system's propaganda.

And look what that bloody revolution brought us.

Nothing good ever comes from violence.

The only solution to the Federal Reserve scam is to make conditions & structures that make that scam obsolete.

We have that... it's called crypto currencies.

Use them.  And simply ignore that evil system.

Oh, how silly!

Plenty of good things come from violence and as an example the preservation of life by a potential victim who chose to not be one!

You may find examples here:

http://www.nraila.org/gun-laws/armed-citizen.aspx

My $.02.

;)

Yep, that's plenty of justification for a bloody revolution.

Now show a bloody revolution that on the other side didn't get something worse then what they started with.  The American revolution is the only one that comes to mind.  But no reason that same revolution could have happened without bloodshed simply through non-violent civil disobedience.  What's the king gonna do, if none of his "subjects" comply?  Arrest all of them?

The same psychopaths behind the Federal Reserve scam have always used bloody revolutions to cement their control.

...and those "revolutionaries" just end up being pawns in their global chess game.

Said to say, but even the American revolution was co-opted by these psychopaths when their agent Alexander Hamilton pushed through the first central bank.

And now we have the monster that is the Federal Reserve.  And with the centralization of power, any vestiges of freedom that revolution earned us are long gone.

Revolution is not the answer, the only solution to these psychopaths is to refuse to participate.  And with crypto currencies we all can refuse to participate yet conduct our biz with far greater ease & efficiency they we ever did using their scam system.

YES ! you are my man. screw their taxes, and provisions and everything that fills their pockets with  OUR MONEY !
they will try, they will try hard, but it is up to us to avoid feeding them.

I don't need permission from a government for my bit coin and they certainly don't have my permission to confiscate it.

 Are you suggesting drug dealers pay taxes? Do they pay back taxes on drugs they sold when they get caught? Like he said, they have to catch him first. :D

  That's fn hilarious!

Honest ones do.  ;D

When they get caught they would owe taxes.

The government "gets" many drug dealers with charges of tax evasion.

If you regularly have deposits exceeding $5,000...or even if you regularly just have a lot of deposits into your account that cannot easily be explained, then you are just begging to be audited. 

By declaring nothing (if you have large cap gains), you are raising such a red flag it is not even funny.

There are ways around the things of which you speak.

How would you get around this? If the deposits are in cash then each $5,000 deposit must be recorded by the bank. The iRS is able to compel you to allow them to look at your bank records.

This may not be setting up a red flag to get audited, but if you do then you would be facing stiff penalties.

In the event that the bank send a suspicious activity report (SAR) then your chances of getting audited go up and it may actually guarantee an audit depending on the circumstances.

re: Your post.

Not nearly enough education in finance and banking laws and certainly you are lacking in creativity and imagination.

Why don't you clarify as to how this would be done instead of telling someone they are uneducated when they question you.