Teresa is going to get a visit from the IRS

[jgarzik]

It'll force the IRS to issue some more detailed tax regulation on Bitcoin though.  In my mind, that's a good thing, as it'll lend additional credibility to Bitcoin.

I don't see why... it's treated the same as being paid in gold or another commodity, really.

[the founder]

It'll force the IRS to issue some more detailed tax regulation on Bitcoin though.  In my mind, that's a good thing, as it'll lend additional credibility to Bitcoin.

I don't see why... it's treated the same as being paid in gold or another commodity, really.

If someone goes and collects silver or gold at their storefront and does not report them..  see what happens... eventually they'll come knocking on your door asking how you paid your employees and how did you pay your social security taxes and your X and Y taxes...

[lettucebee]

It'll force the IRS to issue some more detailed tax regulation on Bitcoin though.  In my mind, that's a good thing, as it'll lend additional credibility to Bitcoin.

I don't see why... it's treated the same as being paid in gold or another commodity, really.

If someone goes and collects silver or gold at their storefront and does not report them..  see what happens... eventually they'll come knocking on your door asking how you paid your employees and how did you pay your social security taxes and your X and Y taxes...

Not only that buy one pays a special "collectibles" premium on metals, a capital gains rate up to 28%.

[cryptoanarchist]

Bitcoin is entirely out of the jurisdiction of the corporate USA. If all you earn is bitcoin, and you don't cash it out - you don't owe the IRS one Satoshi.

Now as soon as you sell them for FRNs - THEN, and ONLY then, do you have to worry about the government trying to steal from you.

I disagree.  If you're doing business within the US, regardless of what unit you use for trade, it can at the very least be considered barter.  And you DO owe taxes on barter.

Thanks for clarifying that.  Could you show me the law that says that, please?

I couldn't cite for you the specific law, but if you want details, read away...!
http://www.irs.gov/taxtopics/tc420.html

um, yeah, that link isn't to any LAW. Not to mention the fact that not only is the idea completely ridiculous, but its totally unenforceable.

[ErisDiscordia]

Statism is one big clusterf*ck that must be destroyed from the bottom up. You can't just "take out" the IRS or any part of the government, even if you had superior firepower... With their propaganda campaigns still in play (and yes, that includes both the media and all public schools) the vast majority of sheeple will always fall for the same tricks as the ones that voted in the current batch of murdering psychopaths.

Peer-to-peer everything is the only way forward.

• Fight their economy by decentralizing money. (Bitcoin)
• Fight their propaganda by decentralizing media. (Torrents, TOR, and Mega)
• Fight their corporation-driven laws by decentralizing product creation. (DEFCAD)
• Etc.

So glad to see that some people get this! I always get so frustrated when people propose new laws, new agencies and new politicians as the solution, when those clearly are responsible for this clusterf*ck.

[SgtSpike]

Bitcoin is entirely out of the jurisdiction of the corporate USA. If all you earn is bitcoin, and you don't cash it out - you don't owe the IRS one Satoshi.

Now as soon as you sell them for FRNs - THEN, and ONLY then, do you have to worry about the government trying to steal from you.

I disagree.  If you're doing business within the US, regardless of what unit you use for trade, it can at the very least be considered barter.  And you DO owe taxes on barter.

Thanks for clarifying that.  Could you show me the law that says that, please?

I couldn't cite for you the specific law, but if you want details, read away...!
http://www.irs.gov/taxtopics/tc420.html

um, yeah, that link isn't to any LAW. Not to mention the fact that not only is the idea completely ridiculous, but its totally unenforceable.

Hey, I didn't claim that people are actually reporting on it properly!

I'm sure it is based on tax law.  The IRS isn't going to go writing up guides on taxation that doesn't match the laws that are in place.

[cryptoanarchist]

I'm sure it is based on tax law.  The IRS isn't going to go writing up guides on taxation that doesn't match the laws that are in place.

LOL...uh-huh...

I think you need to learn the difference between corporate policy and LAW. McDonalds can tell its franchises that they need to sell the new McBarf sandwich and put a sticker for it in the window (policy), but that doesn't make it a law.

But now we're getting into how the government actually works, which isn't understood by those who got indoctrinated in public school with fantasies about the Constitution and founding fathers.

My suggestion is to grab a copy of a book called "Cracking the Code, 3rd ed" and read it twice.

[justusranvier]

I think you need to learn the difference between corporate policy and LAW. McDonalds can tell its franchises that they need to sell the new McBarf sandwich and put a sticker for it in the window (policy), but that doesn't make it a law.

But now we're getting into how the government actually works, which isn't understood by those who got indoctrinated in public school with fantasies about the Constitution and founding fathers.

My suggestion is to grab a copy of a book called "Cracking the Code, 3rd ed" and read it twice.

Law is an opinion with a gun behind it.

Policies are a synonym for law when the people making them will shoot those who don't comply with their demands.

The fantasy is thinking that the Mafia will stop acting like a mafia if you can just find the right sequence of magic words to make them lose interest in robbing you.

[SgtSpike]

I'm sure it is based on tax law.  The IRS isn't going to go writing up guides on taxation that doesn't match the laws that are in place.

LOL...uh-huh...

I think you need to learn the difference between corporate policy and LAW. McDonalds can tell its franchises that they need to sell the new McBarf sandwich and put a sticker for it in the window (policy), but that doesn't make it a law.

But now we're getting into how the government actually works, which isn't understood by those who got indoctrinated in public school with fantasies about the Constitution and founding fathers.

My suggestion is to grab a copy of a book called "Cracking the Code, 3rd ed" and read it twice.

The IRS isn't a corporate entity, as far as I am aware.  Also, as far as I am aware, they are the ones to enforce laws with regards to taxation.

Again, the IRS isn't going to go writing up guides on taxation that do not match the laws that are in place.  If you think they will, then feel free to prove me wrong.

[marcus_of_augustus]

I think you will find that both the IRS and the Federal Reserve were originally set up as corporations in 1913.

[Elwar]

Why is it that whenever someone talks about not paying taxes, someone inevitably has to mention the fact that they are going to get audited or they are going to go to jail. That is sort of a given is it not? Why perpetuate the IRS's fear game for them?

When someone online talks about smoking pot or doing drugs it is not immediately followed by "You're so going to get a visit from the cops and your ass is going to be in jail".

Why is breaking one law followed by reminders of jail while breaking another law is just considered living your life differently than others?

[Epicurus]

Why is it that whenever someone talks about not paying taxes, someone inevitably has to mention the fact that they are going to get audited or they are going to go to jail. That is sort of a given is it not? Why perpetuate the IRS's fear game for them?

When someone online talks about smoking pot or doing drugs it is not immediately followed by "You're so going to get a visit from the cops and your ass is going to be in jail".

Because the cops are, generally speaking, jokers. The IRS are not. Their ability to audit is impressively scary, trust me.

[glitch003]

When someone online talks about smoking pot or doing drugs it is not immediately followed by "You're so going to get a visit from the cops and your ass is going to be in jail".

You're actually incorrect about this.  Go on a drug forum and you will see everyone saying things like "SWIM took acid, it was awesome, SWIM felt like the world was the most beautiful place....etc etc".  SWIM stands for "Someone who isn't me".  If you say something like "I took acid" you will get banned from the forums and people will call you an idiot for admitting to doing something illegal on the internet. 

Haven't you seen those stories of kids who post pictures of themselves doing and making drugs on Facebook and got arrested for it?  Google around.  The cops are on the internet.

Here are some funny ones: http://www.huffingtonpost.com/2010/08/16/arrested-over-facebook-po_n_683160.html#s127052&title=Mother_Arrested_Over

[ralree]

Guys, Girls,   

Encrypting file systems, throw away domains, etc.. this is not the right thing to do... it will only paint anyone that uses bitcoins as a SilkRoad using, Tax Evading drug runner...

The best solution is to pay your taxes.

+1

+2

[Elwar]

When someone online talks about smoking pot or doing drugs it is not immediately followed by "You're so going to get a visit from the cops and your ass is going to be in jail".

You're actually incorrect about this. 

I will wait to see the thread on here pointing out this bitcointalk post and how the DEA will be paying this person a visit:

The road was a god send for me and my weed.  As I got older my "hook ups" disappeared, or grew up themselves, making it more difficult to get good product as I become more domesticated as it were.  ]

Now I don't have to harrass a friend, give them money, wait etc... I just order up what I want.  And being domesticated and all, have an income where I can get larger stashes that last a good while between orders.

I haven't really poked around the other areas too much on the road but the mary jane section has TONS of items and sellers. I would actually guess the opposite, that weed is a pretty big seller on the road.

[BTCLuke]

I would NEVER advise anyone to not pay your taxes.

Just remember to pay your taxes to the correct authority. Sometimes this seems confusing to people, so I took the liberty of drawing up this little chart to help everyone out with this issue:

[Lethn]

This is precisely why companies like Bitspend make so much sense, that way Bitcoin users won't have to worry about taxes at all at least for most things, looking forward to when they do subscriptions.

[BTCisthefuture]

Nice article.  Sadly though I believe 100% that she is wrong. If the government (IRS) wants her to pay taxes she is either 1) paying taxes or 2) going to jail. Period, end of discussion. That's just the reality.

You can fight the IRS if you want and claim you don't have to pay taxes. You aren't going to win though.

I'm no tax expert of finincal expert...but once you convert bitcoins to dollars why would you not have to pay taxes on those dollars. How can you say you don't have pay taxes on US Currency.

If somehow everything was done in bitoin, donations were in bitcoin and she bought all the supplies in bitcoin, paid for the hotels and trains in bitcoin. Then I think she might have a decent arguement.  Of course not that many places accept bitcoin right now so that's simply not a reality.

Also I agree with the OP. Putting yourself in the spotlight this and saying you aren't going to have to pay taxes is a great way to piss off the IRS and make them say "oh really? we will see about that".  The IRS like anything else in life doesn't like to be made a fool off, caling them out an challenging them on this is a great way to just cause more problems for you.

[BTCisthefuture]

It'll force the IRS to issue some more detailed tax regulation on Bitcoin though.  In my mind, that's a good thing, as it'll lend additional credibility to Bitcoin.

word. while the creators and original adaptors of bitcoin may not like the idea of taxes and government involvement with bitcoin it certainly would make it more mainstream and legitimate imo.

[SJet2003]

Absolutely pay your taxes.  Last year I paid 20% long term capital gains on the few thousand I cashed out (needed a car).  Haven't heard back on that - so in the absence of feedback I'm figuring it was OK.

This year I'm not planning on any cashouts to declare.

But just because you pay your taxes doesn't mean that any unrealized holdings are anybody else's business, including the IRS.  And I'm generally very privacy oriented - especially where my computer is concerned.

Just playing devil's advocate here and I'm not saying that it would be easy to do it, but wouldn't it be better to pay for the car in BTC?
(Just as long as any delivery charge / travel costs for finding someone that will accept BTC is less than the 20% you'd have paid in capital gains.)