Bitcoin Forum

The Federal Election Commission made a first-of-its-kind decision Thursday, issuing guidance to allow political action committees to accept Bitcoin donations from their supporters.

The FEC voted 6-0 to allow Make Your Laws PAC to accept up to $100 worth of bitcoin per contributor each election, but must “sell the bitcoins it purchases and deposit the proceeds into its campaign depository before spending those funds,” the panel said in its advisory opinion memo to the PAC. It also said that PACs “should value that contribution based on the market value of bitcoins at the time the contribution is received,” and that “earnings (or losses) realized upon the sale of any bitcoins ... must be reported like other investment earnings or losses."

“That means anytime you use it, you must account for it in the same way you would the sale of a stock for capital gains purposes. Not doing so is illegal and punishable as tax avoidance,” Boom Bust producer Edward Harrison said in an e-mail. “Using bitcoin as payment for PACs, therefore makes PACs subject to IRS search warrants to catch individuals avoiding taxes illegally. And given what we have seen in Switzerland in cracking down on tax avoidance, we should fully expect the IRS to use this to justify PAC search warrants, whether politically motivated or not.”

Despite the potential legal ramifications from the Pentagon, SEC or the IRS, politicians are already jumping on the Bitcoin wagon. Rep. Jared Polis (D-Co.) was the first pol out of the gate, less than six hours after the FEC decision.

Chris Mills 09.05.2014 01:12

WOW, I'm shocked! Who'd have thought the government would want to control digital currency!?
There is NOTHING we can create that they won't control us with.
If I was God I'd apologise for any inconvenience and then send a few solar flares to wipe us all out. It's only 6 days of work lost.

I am not too sure about this limit of $100 contribution from any single person per election. How they will calculate the limit if a single guy sends in his coins from 25 different addresses, all under $100?

“A committee treasurer is responsible for examining all contributions received for evidence of illegality and for ascertaining whether contributions received, when aggregated with other contributions from the same contributor, exceed the contribution limitations,” read the proposal.

It continued by saying that if the “contribution cannot be determined to be from a legal source, the treasurer must refund the contribution within 30 days of the receipt of the deposit or the discovery of the illegality.”

^^^ WTF? So they should refund the Bitcoin contributions if it is made anonymously? Then what is the use of doing Bitcoin donations. We use Bitcoin for the anonymity it provides. This news is no good for us.