Imposing tax on bitcoin

[Rooster101]

What if the Internal Revenue service of the US decided to tax bitcoin transactions, what would be the possible effects on its price and the bitcoin community. Will the other governments follow?

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[Carlton Banks]

They can decide all they want, taxing Bitcoin transactions isn't going to bag them much loot. Bitcoin users are into self-defense, that's the whole point of Bitcoin to begin with. Defending against the IRS (presumably using the NSA) snooping on Bitcoin transactions is trivial, in so many ways.

[croutonhexagon]

Imposing tax on bitcoin is almost impossible because it's something like private asset and government have nothing to do with it. We had mined and created bitcoin for us and here government doesn't have any role so why should we pay taxes.

[groll]

What if the Internal Revenue service of the US decided to tax bitcoin transactions, what would be the possible effects on its price and the bitcoin community. Will the other governments follow?

I think if bitcoin will be taxed by the government, then there'll gonna be changes in the pace of its price movement. People who uses bitcoin will be added another encumbrance for extra fees will be imposed to bitcoin transactions. For me this is not a good idea for bitcoin. The government should not interfere bitcoin. It is designed to make people free from any intervention especially the government taxation.

[Wind_FURY]

I really hope that all governments will try to impose taxes on Bitcoin. This will force the developers to double down on decentralized trading exchanges making the community stay away from Coinbase and the others that are forcing KYC/AML on us. I can see a future for Tether USD or a fiat for crypto implementation to trade at decentralized exchanges.

[pooya87]

What if the Internal Revenue service of the US decided to tax bitcoin transactions, what would be the possible effects on its price and the bitcoin community. Will the other governments follow?

they can not and will not tx bitcoin "transactions" because first of all it requires a lot of work and spending lots of time and resources on blockchain analysis and then you can't even come up with decent results.

instead they will use services you use to take taxes from you, like the wallet you use (coinbase) or exchanges you use to buy (regular ones or localbitcoins)...

[~Bitcoin~]

check https://en.bitcoin.it/wiki/Tax_compliance

It is clearly mentioned there that in US, IRS treat bitcoin as assets so therefore it is taxable. However it is true that they can't impose tax on all bitcoin related transactions but they can add tax when you exchange bitcoin to fiat and vice versa.

[boyptc]

What if the Internal Revenue service of the US decided to tax bitcoin transactions, what would be the possible effects on its price and the bitcoin community. Will the other governments follow?

There can be changes but mostly we are the ones who will suffer with it especially if you are using an exchange site that is base in US. But that is only applicable to their country and if you are not residing there and you live offshore then you should have any problem to it. But I guess this will make some changes for the price and I'm not sure if it will be good or bad.

[MingLee]

What if the Internal Revenue service of the US decided to tax bitcoin transactions, what would be the possible effects on its price and the bitcoin community. Will the other governments follow?

It'll be pretty difficult to prove who owns what address and where the Bitcoin is being exchanged for cash, if at all, and they would have to rely on data from exchanges based within the United States for any of that to work. It is incredibly taxing and challenging to find exact owners and, similarly, people who are even taxable. For the most part it'll cost more to find the person.

[Silberman]

What if the Internal Revenue service of the US decided to tax bitcoin transactions, what would be the possible effects on its price and the bitcoin community. Will the other governments follow?

Any income in theory must be reported and taxed at the appropriate rate, however taxing transactions does not seem possible because there is not value in transactions you could be moving bitcoin form one of your addresses to another in that case a transaction in the blockchain happened but the bitcoin did not exchange hands that is just like moving your money form one pocket to the other.

[Hazir]

Fighting with bitcoin network directly and potential attempts of taxation are so stupid that I doubt anyone would try this.
I said it many times, bitcoin transactions are safe - there won't be external taxation. There could be tax imposed on bitcoin satellite services, it is much easier that way.
Exchanges, bitcoin payment processors, shops, services - every kind of business dealing with BTC could be targeted and taxed in the future.

[DannyHamilton]

This whole thread is filled with nonsense and bad advice.

The U.S. government ALREADY taxes bitcoin transactions. You are required by law to report every transaction and to pay capital gains taxes on the difference between the price you paid for the bitcoins and the price you spent them at. Choosing not to do so is illegal.

Many people may choose to ignore this law, and it would be difficult in most cases for the IRS to figure out whether you gained anything from bitcoins. That doesn't mean the transactions aren't subject to reporting and taxes.  It just means you are a criminal that hasn't yet been caught.

Every jurisdiction is different, and you should contact a tax preparer, accountant, or attorney that is familiar with your own jurisdiction to learn exactly what your personal reporting and tax requirements are.

[Kakmakr]

Bitcoin is a commodity in the US, if they want to tax every transaction, they will have to re-define Bitcoin as a currency. You have to report Capital Gains and extra income on your tax return, so you are already paying taxes or should I say, should be paying taxes on Bitcoin.

If you not doing that, you might end up with huge penalties and also some jail time for tax evasion.

[DannyHamilton]

Bitcoin is a commodity in the US

Correct.

if they want to tax every transaction, they will have to re-define Bitcoin as a currency.

Transactions with bitcoins are considered "barter".  Tax on barter transactions must be paid just like if the transaction was not barter.  If you buy a car in the U.S. with bitcoin, You're still obligated to pay the sales tax on the purchase.

You have to report Capital Gains and extra income on your tax return, so you are already paying taxes or should I say, should be paying taxes on Bitcoin.

Correct.  So if you buy 20 bitcoins for $500 each and you then spend those 20 bitcoins to buy a $20000 car, you'll need to pay sales tax on the purchase of the car and capital gains tax on $10000 in gains.

[DimensionZ]

I think if the US government are going to tax Bitcoin they will first try regulating all the Bitcoin exchanges in the USA and they will most probably gather all the needed personal and financial information from them. So every time a customer buys or sells Bitcoin the IRS will know how much to tax and for what exactly.

[xuan87]

If the US government taxed bitcoin transaction, it will affected the price and bitcoin usage, most of the user like to used bitcoin because they don't need document to send huge amount of money and don't need to pay the tax, if government try to regulate then the number of transaction will get lower, and for sure other government will follow this, they like to taxed all the things and in the future the government will try everything so bitcoin will be taxed

[J Gambler]

What if the Internal Revenue service of the US decided to tax bitcoin transactions, what would be the possible effects on its price and the bitcoin community. Will the other governments follow?

US goverment will not going to do this thing because they don't know where the real bitcoin and where the bitcoins comming from and if they gonna do this they are going to build or create own blockchain so it will going there our transaction and it will not affects the price of bitcoin for sure.

[Barbut]

How they can tax transactions, is that possible? Maybe they can try to tax sender or recipients, I don't know. This is too confusing topic I believe.
Anyway this will effect the price, if some government decide to tax bitcoins in anyway they will need to male appropriate laws and services for that, maybe that will give more security to us user's. For me that is not necessary thing, I can protect myself, but majority in this world love government regulations and they believe in system, this can speed up adoption in the world.

[stomachgrowls]

What if the Internal Revenue service of the US decided to tax bitcoin transactions, what would be the possible effects on its price and the bitcoin community. Will the other governments follow?

I cant think of any way on imposing tax on bitcoin hence they cant go deep into the blockchain and get taxes on each transactions.Thats why its an impossible thing for government to control or breach it but the thing comes to my mind is the possibilities that they could impose tax from merchants who uses bitcoin on payments and any other businesses related to it.

[beerlover]

They can decide all they want, taxing Bitcoin transactions isn't going to bag them much loot. Bitcoin users are into self-defense, that's the whole point of Bitcoin to begin with. Defending against the IRS (presumably using the NSA) snooping on Bitcoin transactions is trivial, in so many ways.

To me they cannot impose tax on bitcoin, as bitcoin is a decentralize currency and not a single country can claim bitcoin as their own currency, but I think if they want they can impose on these people who are doing transaction in their USA, but worldwide they have no right  to impose tax on bitcoin.