The IRS is Due to Present its Digital Currency Strategy to Congress Next Week

[OmegaStarScream]

The US Congress wants answers from the Internal Revenue Service (IRS) about its investigation into bitcoin tax avoidance – and they’re due by next week.

Those answers are due by 7th June, or next Wednesday. A representative for the IRS was not immediately available to comment when contacted about its plans to respond. Details: http://www.coindesk.com/the-irs-will-present-its-digital-currency-strategy-to-congress-next-week/

What do you expect the decision will be at the end? those who have their identity all over the bitcoin exchanges won't have the best of their times.

[Kprawn]

We will see some red faces and then it will be a thing of the past, like we had with Silkroad and MtGox. If a small percentage of users misuse a

technology and a large percentage of the users abide by the rules, then congress should be happy.  .... The internet has followed the same

path in the beginning. Proper regulation will sort out most of the tax avoidance issues. Bitcoin is not the only tools that are being used to avoid

tax... right

[BrewMaster]

this is the "land of opportunity" for you
while other countries are moving forward with bitcoin regulations, adopting it as a legal way of payment, their Forex brokers adding it to their platforms, their merchants and businesses accepting bitcoin, ... US is still struggling with things like this, no regulation, taxes, and SEC is still denying bitcoin!

and things like this will just make traders move on to OTC trading and kill the exchanges.

[BTCforJoe]

I can't imagine that the IRS would intervene with trying to monitor and track cryptocurrency. The volume of trading in the US is just a drop in the bucket compared to the stock exchange for fiat currency, and in order to properly monitor crypto users, there has to be implementation of standards and regulations on multiple different platforms. I can imagine that some of the bigger exchanges that operate to US customers would be targeted by the IRS, but that just means that those users would then migrate their trading elsewhere. I don't think any crypto exchanges want to give up their users' privacy, as that would be like them shooting themselves in the foot.

If I was the operator of an exchange, I would tell the IRS to fuck off, send a mass email to all my users informing them that the exchange was shutting down, so to make sure that they log in and withdraw their balances.

The good thing is that so far, Coinbase has pretty much told them to fuck off:

"[W]e strongly question whether the IRS has actually established a reasonable basis to support the mass production of records for half of a million people, the vast majority of whom appear to not be conducting the volume of transactions needed to report them to the IRS. Based on the information before us, this summons seems overly broad, extremely burdensome, and highly intrusive to a large population of individuals."

I hope they don't turn, but it sounds like they won't, because, as I said earlier, that will be the death of their own service.

Good luck, IRS, but there's no centralizing this decentralized market, no matter how hard you try. We will prevail

[OROBTC]

...

Automated blockchain analysis tools are being developed all the time, at some point they will be good enough to break any kind of BTC mixing.

Two "Bottom Lines"

1)  The IRS had better issue AND publicize very clear rules on BTC buying, selling, trading and spending

2)  If they do so, DO NOT F**K with the IRS (Americans), you cannot beat the Big Rhino.....

[bartolo]

I'm pretty sure they are going to ask that it´s mandatory for the exchanges to identify all users from the United States and to send annual reports of their operations, deposits and withdrawals. They will surely report cases of tax evasion, whether real or not, to support their proposal.

[dissident]

The tax bullshit is the biggest hurdle to widespread adoption. Technically you'd have to log every purchase you made, track the price of the bitcoin when you bought it, and the price of the bitcoin when you bought your goods. Needlessly complex, which is why I simply sell my crypto in big blocks and track it for long term capital gains purposes.  

Just lay down some clear rules, that's all I want.

The reason it takes longer to get things done in the US is the US government is more focused on what makes them money and the bigger you are the more attention you get. Other countries actually look at public policy from a more public oriented standpoint, rather than from the standpoint of the large corporations and banking oligarchs.

[olubams]

The US Congress wants answers from the Internal Revenue Service (IRS) about its investigation into bitcoin tax avoidance – and they’re due by next week.

Those answers are due by 7th June, or next Wednesday. A representative for the IRS was not immediately available to comment when contacted about its plans to respond. Details: http://www.coindesk.com/the-irs-will-present-its-digital-currency-strategy-to-congress-next-week/

What do you expect the decision will be at the end? those who have their identity all over the bitcoin exchanges won't have the best of their times.

The report will come and I am expecting that its going to be a confirmation of of what the Congress already know and what we all know as well and that is the fact that they cannot control bitcoin and if they cannot do that, I see an opening for tax avoidance where its not possible for it to be tracked and if the selling and buying is done using cash then there is definitely no way to track it.

[jbreher]

those who have their identity all over the bitcoin exchanges won't have the best of their times.

Why? We figured out back in 2011 or so that the fact that our profits were due to virtual currencies did not absolve us from taxes on this profits - when they become realized gains. Anyone who has been trying to avoid this has been willfully ignorant.

[FiendCoin]

The problem with Bitcoin in the US is that it is being treated as money by the courts and property by the IRS. This can not continue, it has to be treated as one or the other and to continue treating it as property will stifle adoption and innovation in the US. I wouldn't count on congress to get their shit together anytime to pass laws for it though.

[iluvpie60]

Luckily for me I previously lost all my BTC! lol...Not lucky though obviously... Long story don't feel like telling, but I probably wouldn't have to pay taxes on losing BTC since I didn't realize gains.

[SingAlong]

this is the "land of opportunity" for you
while other countries are moving forward with bitcoin regulations, adopting it as a legal way of payment, their Forex brokers adding it to their platforms, their merchants and businesses accepting bitcoin, ... US is still struggling with things like this, no regulation, taxes, and SEC is still denying bitcoin!

and things like this will just make traders move on to OTC trading and kill the exchanges.

US been struggling with Bitcoin and other cryptocurrencies while Japan accepts it with a very open-minded approach. As soon as it has been legalized, Bitcoin just spread which a lot of companies have taken a liking with it and it has been accepted with hundred of thousands stores across their country. They basically made good use of Bitcoin. While US on the other hand is arguing as to where should they categorize these digital currencies and put some taxes to make money on it. They better consult Japan so that they can decide as to how they will regulate it. 

[OROBTC]

Luckily for me I previously lost all my BTC! lol...Not lucky though obviously... Long story don't feel like telling, but I probably wouldn't have to pay taxes on losing BTC since I didn't realize gains.

Hmm.  I lost some BTC in a scam, even mentioned it on a thread here.  I DO have gains, your comment above will save me a few bucks, thank you.

Some of the rest of my I lost in one of those awful boating accidents you hear about gold owners seem to have.  Boats don't seem to mix well with BTC and gold, be careful out there!