Beware Bitcoin Users! Is Bitcoin Taxation inevitable?

[Snorek]

"Any opinion that says bitcoin's not taxable — any attorney will say that’s hogwash. The better question is when and how it will be taxed," said attorney Tyler Robbins.

"Robbins also observed that anti-money laundering agency FINCEN can share information with other parts of the Treasury Department, including the IRS.
Bitcoin watchers will recall that FINCEN is the agency that seized millions from bankrupt exchange Mt. Gox last year and presumably obtained customer account information in the process."

Is this our future, total taxation of bitcoin? Do you think government will obtain your personal info through exchange markets and then use it to collect bitcoin tax from you? What do you think?


Source: https://gigaom.com/2014/03/24/bitcoin-barons-face-tax-dilemma-as-april-15-deadline-looms/

[Amph]

many that were holding money on mtgox, are not even usa citizens, IRS can't do shit to tax those, and many of those live in country were bitcoin is not taxable yet, not regulated at all

i'm not declaring anything for now because in my country is not regulated either, until then bitcoin is not taxable for me, i see it as a stamp collection

[Miracal]

If we move to the bitcoin economy, the govs will find the way to tax bitcoin, which will compensate for the reducing amount of taxed fiat money revenue. At the time, the adoption rate would be huge. Like fiat money, you can still find ways to evade the taxation but the gov will be chasing your bitcoin flows behinds you! 

[syamster]

Its not hard to put tax on btc, in my country its very hard to tax on btc, because I am trading btc with USD, I dont take my profit to my currency, so until I convert it to my currency, its hard to put tax on my Income, but the problem is when I convert the btc to my currency at that time they can put tax on my money...

[BADecker]

Wake up and see that nothing is taxable except people.

Who else are you going to tax? Tax is simply one person stealing from another. It is a group of people stealing from others. If they weren't stealing, it would be donations by the others.

You can't tax the land. You might be able to rape the land in the sense that you do not replace the natural resources that you take from it.

You can't tax the animals. You might force them to do work for you, like an ox turning a water pump. But this is more like slavery.

How can you tax Bitcoin? Bitcoin is simply an encrypted ledger called a blockchain, and the method for accessing the ledger. You can't tax it. You might be able to mess with the encryption somehow. But that isn't taxation. It is simply "playing" with some form of mathematics.

It is only the people who are taxable. Bitcoin might be some kind of a measure as to how much the people are taxed. But it is still only the people that are taxable. And taxation is essentially a group of people stealing property from other people for the benefit of the thieves and robbers who do the stealing.

[BIT-Sharon]

If we move to the bitcoin economy, the govs will find the way to tax bitcoin, which will compensate for the reducing amount of taxed fiat money revenue. At the time, the adoption rate would be huge. Like fiat money, you can still find ways to evade the taxation but the gov will be chasing your bitcoin flows behinds you! 

This is true. However, this is another way to prove that Bitcoin has its power to government and banks. It is widely accepted by the publics.

[InceptionCoin]

There are income tax and tax on ownership.
I think that income tax is ok and it will be made by two principles:
1) you should pay tax from profit if you bought btc low and sold high, the same if you buy and sell any shares(like AAPL).
2) all companies income in btc should be denominated in national currency and then taxes will be earned as usual.

About tax on ownership:
this is more complicated thing. Usually tax on ownership is part of social contract, i mean you pay for service of protection of your rights on the possessions. Governments will try to get monopoly on protection-btc-ownership-rights too. Well i dont know how strict it will be. The ideal model in my opinion is insurance scheme: if you declared some btc you will pay tax for that and you will know that your ownership right will be protected. If you are not declared this btc and somebody stole it - government will not obliged to return it.

[Hazir]

It is quite sad that if you use some major exchange market now to buy/sell your bitcoins, you will most likely will be targeted in the future by government and forced to pay taxes. I find it unjust and for me it is just stealing and extortion. They can tax everything related to currency printed by them but why they have to tax bitcoin? Their greed is something undreamed of.

[countryfree]

I know for sure some people will never pay any tax on their BTC income, nor any of their income. It mostly depends where you live.

[Snail2]

There are income tax and tax on ownership.
I think that income tax is ok and it will be made by two principles:
1) you should pay tax from profit if you bought btc low and sold high, the same if you buy and sell any shares(like AAPL).
2) all companies income in btc should be denominated in national currency and then taxes will be earned as usual.

WHy should I pay any tax on my BTC income. That income comes from trading so it should be CGT, and I fiercely disagree with taxing that. Did the government gave me trading signals? Are they providing me any sort of protection if bitwhatever gets hacked and my funds stolen? If the answer is no, then I'm alone on an unregulated market, I'm taking all the risks, so the govt have no business with my gains there.

Tax on ownership is even more ridiculous. WTF the govt did to help me obtaining my coins. Nothing. For zero contribution I'm happy to pay them a big fat zero as a reward :/.

[ashour]

If your country doesn't have regulations regarding bitcoin and it would be for small amounts of bitcoin I wouldn't declare them. Even if they knew I had bitcoin and I would refuse to to pay taxes for them how would they get my bitcoin ? Call the blockchain and order it to clear my account  ? They would have to beat me until I gave them access to the bitcoins.

[neurotypical]

I know for sure some people will never pay any tax on their BTC income, nor any of their income. It mostly depends where you live.

It doesn't matter where you live, if your BTC doesn't leave the BTC ecosystem, how in hell will they find out?

For example, you are in a sig campaing, you get paid with BTC. Unless you convert that BTC in fiat, they will never know you own all the BTC you did on that campaing, or doing X job where you got paid directly in BTC, etc etc.

The problems start when you want to cash out for filthy fiat.

[smolen]

Even better idea, put VAT accounting into protocol and get refunds signed only by government private key

[GenTarkin]

Bitcoin is already taxed at least in the USA..... its taxed as property capital gains / loss

[DebitMe]

Bitcoin is already taxed at least in the USA..... its taxed as property capital gains / loss

Correct, also mining bitcoin has to be reported as self employment income.  This will increase the amount of tax you owe, but at least you will be able to deduct the costs of electricity and depreciate your rigs now.

[ashour]

Bitcoin is already taxed at least in the USA..... its taxed as property capital gains / loss

This is nothing new though, it's common sense to know as a bitcoiner that bitcoins are taxable in the united states.

[Amph]

Bitcoin is already taxed at least in the USA..... its taxed as property capital gains / loss

remember that bitcoin is only taxable even in usa, only if you convert it in fiat, otherwise you can evade taxes pretty easily, if you use something like brawker or all4btc

[lucasjkr]

I know for sure some people will never pay any tax on their BTC income, nor any of their income. It mostly depends where you live.

That's right. The article talks about America and not the world. If America starts taxing Bitcoin and the rest of the world doesn't follow, people will start moving their businesses outside the taxed zone.
That's unless the tax is very low and offers some benefits to the payer, like financial help offered by the government to people who want to start their small Bitcoin business.
I'd have nothing against paying taxes if I got something in return.

What do you want in return? Paved highways? The FCC monitoring frequency usage so as to try to prevent as much overlap as they can? An organization to monitor pollutants entering our drinking water and making sure that corporations don't turn our reservoirs and aquifers to sludge? Or do we think the free market would sort everything out, like the NG polluted drinking water surrounding tracking fields?

[gentlemand]

If there are monetary gains then there'll be tax. You'd really need a closed loop crypto economy to be confident of avoiding tax because things'll light up as soon as you go full fiat.

Most people probably could get away with tax evasion with the present system. Most pay it simply for a quiet life.

[dothebeats]

"Any opinion that says bitcoin's not taxable — any attorney will say that’s hogwash. The better question is when and how it will be taxed," said attorney Tyler Robbins.

"Robbins also observed that anti-money laundering agency FINCEN can share information with other parts of the Treasury Department, including the IRS.
Bitcoin watchers will recall that FINCEN is the agency that seized millions from bankrupt exchange Mt. Gox last year and presumably obtained customer account information in the process."

Is this our future, total taxation of bitcoin? Do you think government will obtain your personal info through exchange markets and then use it to collect bitcoin tax from you? What do you think?


Source: https://gigaom.com/2014/03/24/bitcoin-barons-face-tax-dilemma-as-april-15-deadline-looms/

It saddens me to see that we are still headed for this regulations and authorities. The main objective of bitcoin is to free its users from regulations and central authorities, but it seems that these people won't stop until they gain control over the people using bitcoin. They are slowly inching towards their goal; exchanges asking for credentials and personal information from their customers before processing or making a transaction with them, different regulations, and now, taxation. At least there are still countries who don't count bitcoins as a taxable asset, but I know for certain that they will soon follow the example set by those countries who implemented it first. The only thing that a user of bitcoin can do to not be taxed is to hold bitcoin as it is and avoid--as much as possible--exchanging it to fiat.