irs and coinbase

[Theb]

Why the hell will they do that? IRS is a government department of the United States and as far as I know it operates in a legal way, they are not the FBI or CIA in which they are authorize to do so. They need to have permission with Coinbase before accessing those accounts as if they do without any permission they are in violation of the users' privacy. Also even if they are successful on penetrating a wallet how will they link you or how will they link your transactions if it came from a mode of payment or just a remittance? It would be a complete waste of time for their part.

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[chaoscoinz]

There used to be lots of talks about the irs cracking down on coinbase accounts. Is there anything new on this? Did someone get fined or arrested?

Did anything happen?

As of now, their hasn't been any major crackdowns upon tax evasion for bitcoin, and crypto currencies alike. In the future, the regulations that will be put into affect, will act as a map for legal guidance concerning tax compliancy, and many other financial related policies.
   Coinbase was subpoenaed to hand over tax information of all account holders with $20,000 dollars or more in bitcoin related transactions. Whether or not that makes others acount holders who fall under this amount in total transactions exempt, is quite questionable. The best advice to give you, would be to follow the crypto related news outlets, and other mediums of media quite carefully. Regulations will come about gradually (slowly but surely)!
  For now, researcher the previous entries of regulation, and policy by checking places like coindesk.com, etc.

[lichao1395427]

Regulation will be coming.

But it will be a good thing, IMO.  It will legitimize the currency, end differing definitions of what Bitcoin "is" at various regulators, and probably put in place a framework for ICOs that balances the innovative financing model with some level of protection.  They're also looking at chartering limited purpose Federal banks for crypto exchange businesses, which might sound scary but the reality is they would be a big benefit in legitimizing the business model without having to go through the 40+ states that require money transmitter licenses.

Some regulation is necessary for widespread, mainstream trust and acceptance.  Which seems counter-intuitive to some extent but that's the fact of the matter.

[RedX]

Regulation will be coming.

But it will be a good thing, IMO.  It will legitimize the currency, end differing definitions of what Bitcoin "is" at various regulators, and probably put in place a framework for ICOs that balances the innovative financing model with some level of protection.  They're also looking at chartering limited purpose Federal banks for crypto exchange businesses, which might sound scary but the reality is they would be a big benefit in legitimizing the business model without having to go through the 40+ states that require money transmitter licenses.

Some regulation is necessary for widespread, mainstream trust and acceptance.  Which seems counter-intuitive to some extent but that's the fact of the matter.

I really hate it that regulations still need to happen but you are right. Regulations sometimes means that this thing can be trusted and it will give investors confidence to buy cryptocurrencies. I just still hope that our tax department only tax bitcoins if it is converted to fiat.

[DPoS2]

I am always surprised at how little people know about taxes. I guess it's a combination of an ever more complex system and a total lack of teaching taxes in schools.

In the USA you owe tax anytime you make money. If you earn money from work you owe income tax.
If you see a gain in value when you trade something, be it money or anything, you owe capitol gains tax.

Even if you find a gold ring buried in your yard you owe on it. ALL MONEY IS TAXABLE. This is not the government attacking bitcoin. It has been the law for decades.
  

Cost basis is not the simple equation with all things bitcoin related..  proving cost basis gets pretty tricky as well.    No central exchange to say what was the price on any given day during the Mt Gox fiasco (there was insane arbitrage.. so what WAS the price during those days?)

Not everything was simple bought & sold on one exchange with one price...  mark to market is the devil in the details..  mining, alt coins, gifts..  how long you held which parts of which bits can make for short term / long term gains.. hacked, lost, scammed...  etc

[pereira4]

The IRS has always been working with Coinbase, I don't know why anyone would be surprised to find out about that. You never had any privacy using Coinbase. Everything you do is automatically reported to the IRS, so you better keep track of all of your movements or else you'll have problems.

I am always surprised at how little people know about taxes. I guess it's a combination of an ever more complex system and a total lack of teaching taxes in schools.

In the USA you owe tax anytime you make money. If you earn money from work you owe income tax.
If you see a gain in value when you trade something, be it money or anything, you owe capitol gains tax.

Even if you find a gold ring buried in your yard you owe on it. ALL MONEY IS TAXABLE. This is not the government attacking bitcoin. It has been the law for decades.
  

Cost basis is not the simple equation with all things bitcoin related..  proving cost basis gets pretty tricky as well.    No central exchange to say what was the price on any given day during the Mt Gox fiasco (there was insane arbitrage.. so what WAS the price during those days?)

Not everything was simple bought & sold on one exchange with one price...  mark to market is the devil in the details..  mining, alt coins, gifts..  how long you held which parts of which bits can make for short term / long term gains.. hacked, lost, scammed...  etc

There are MANY voids when it comes to tracking the bitcoin price back what it was a certain date. This is why I haven't sold a single bitcoin yet.

For example, my trading history in Mintpal and Cryptsy is gone as the exchanges are dead, so what the hell im supposed to do now if I want to sell these coins? I don't have a clear track history of my gains on there... this sucks. If you sell, you are taking a gamble to see what they will do about it. They may steal all of it for all I know. Since I have not seen any precedents, im not going to sell until someone else does it first to see what happens exactly on that situation.

[Tai Chi Chain]

The IRS is in no way cracking down on the exchanges. Now they are going to do their job and go after tax cheats who want to stick their neighbors with the bill. That is what the IRS does.

Pay your taxes and ignore the IRS. Or cheat on your taxes and pay the price. Plus interest and penalties, and jail time.

Couldn't have said it any better..


PAY ALL TAXES. STOP TRYING TO WORK AROUND THE SYSTEM.

I feel as if their should an age requirement in order to signup on this site.

Everyone is trying to dodge taxes, no wonder they are cracking down.

Despicable.

[Kumic]

Kid played with Bitcoin and made millions and now they wanna take him to prison...Common that is not gonna happen. Governments still don't have a clear model of how this should work yet. A kid is still free and spending his money.

[Proton2233]

Americans have always very carefully monitor the payment of taxes. It's bad when people don't pay taxes. My opinion is that if you don't like how you distribute your taxes then you have a chance in the elections to change the team. By default you have accepted the terms of payment of taxes. So you have to pay or go to jail.

[richardsNY]

PAY ALL TAXES. STOP TRYING TO WORK AROUND THE SYSTEM.

I feel as if their should an age requirement in order to signup on this site.

Everyone is trying to dodge taxes, no wonder they are cracking down.

Despicable.

Of course people try to avoid paying tax, I can't blame them for that. If you invest $50,000 in crypto, which is money you (likely) paid tax over numerous times already, and again be forced to pay tax, it's going to feel like you are being robbed (even more so than the previous time you paid tax over the same amount of money). It's a legal form of theft that you indirectly try to justify right now -- people avoiding tax aren't doing anything other than protecting their capital from money hungry authorities. I am actually shocked to see you speak out like that. Do you seriously believe that if the tax rates were appropriate and humane, that people would even consider avoid paying "due" taxes? Seriously, this actually angers me....

[gentlemand]

I've seen quite a few posts from people who've been told they're one of the thirteen thousand reported to the IRS. What's interesting is that they've never sold on there and they're not American nor have ever been there.

Americans, your tax dollars are being wasted pursuing ghosts.

[squatter]

I've seen quite a few posts from people who've been told they're one of the thirteen thousand reported to the IRS. What's interesting is that they've never sold on there and they're not American nor have ever been there.

It doesn't matter whether you've sold on Coinbase or even if you are American. The order is for "all users who have bought, sold, sent, or received more than $20,000 through their accounts in a single year between 2013 and 2015." That means that people using Coinbase merely as a web wallet can be reported to the IRS -- yet another reason never to use third party web wallets. You are subject to their jurisdiction, whether or not you've done anything wrong.

That said, you don't need to provide much PII to Coinbase to use them as a wallet, and if you didn't sell on Coinbase there is no proof that you have taxes due. Nonetheless, it's an extreme invasion of privacy, so people should take note.

Americans, your tax dollars are being wasted pursuing ghosts.

Don't we know it! Suggestions? Our tax dollars are used to murder countless children, too. Not much we can do about it, short an actual revolution. And I'm all for revolution, but this population? Completely pacified and stupefied.

[BitHodler]

Not much we can do about it, short an actual revolution. And I'm all for revolution, but this population? Completely pacified and stupefied.

With crypto you at least have a choice to not pay tax, but that requires complete isolation where you can't use any central service within this ecosystem at all. I am all for a revolution too, and would love to participate in one.

And legally, even with that complete isolation you are committing a severe crime according to the law, which is almost funny if you think about it. I see you willingly paying tax over your holdings as you agreeing with this system.

I agree with richardsNY in that regard, it's theft and theft only. And as you pointed out, it's income that the USA uses to finance its endless horrific crimes against humanity, and that year after year.

People allow this system to remain up and running, where nothing even points to a potential shift away from people's brainwashed fool mentality.

[DPoS2]

Not much we can do about it, short an actual revolution. And I'm all for revolution, but this population? Completely pacified and stupefied.

With crypto you at least have a choice to not pay tax, but that requires complete isolation where you can't use any central service within this ecosystem at all. I am all for a revolution too, and would love to participate in one.

And legally, even with that complete isolation you are committing a severe crime according to the law, which is almost funny if you think about it. I see you willingly paying tax over your holdings as you agreeing with this system.

I agree with richardsNY in that regard, it's theft and theft only. And as you pointed out, it's income that the USA uses to finance its endless horrific crimes against humanity, and that year after year.

People allow this system to remain up and running, where nothing even points to a potential shift away from people's brainwashed fool mentality.

Mining is completely being attacked by the IRS

[tweetbit]

I will stand along with those accounts not to be individually prosecuted by government for taxation purposes, it’s beter for all that the exchanges/provider is the one be audited and in every transaction there is a percentage % that will be given to IrS. It will lessen the corruption and the same way that the privacy of the clients/bitcoin users be protected.