Not Declaring Bitcoin Income

[GreenBits]

I understand the above arguments. It's just that I don't think the double-spend risk is that big of a problem for fiats.
The blockchain currencies have a technological advantage of transaction processing/recording. I think what's going to happen is that we will see a symbiosis of the traditional financial world and virtual currencies.

Amen. people dont get that the only advantage of a blockchain is that it is an immutable record. if you dont need an immutable record, essentially, a special type of the very common database, there is no need for a block chain. if you dont need consensus, just a record, then its actually a waste of time. for certain industries, a blockchain might improve operation (delivery, insurance, and obviously, payments) as these benefit from having community consensus.

for everything else, a block chain is just painting the lily, so to speak.


to get back on topic, fiat has solved the money issue elegantly for quite some time. i dont think the problem is with fiat, its with how we handle and distribute fiat, socially. we dont, and it doesnt seem to trickle down very well

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[Don Pedro Dinero]

Well, it depends on what you mean by “income”. As other have said, governments are able to track your income when you convert BTC to FIAT but they aren’t able to track your balance in most currency exchanges. They are not able to trace if you have paper wallets or hard wallets either. In my country, the law states that you don’t have to pay tax unless you convert cryptos to FIAT. They are taxed as stock investments: you don’t pay until you sell because you may lose all your money.

It is highly unlikely that they will be able to catch you if you use BTC to buy goods or services directly, or if you use pre-paid debit cards for example.
If you don’t declare your income, IRS may get you but, in my country, they have four and a half years to catch you, otherwise they can’t prosecute you.

Summarizing, governments can track some of your bitcoin income but there are different ways to avoid paying tax.

However, I advise you to pay taxes so you won’t have to worry about getting caught.

[suppersz]

At the moment the IRS can only monitor bank accounts. So if you never cash out, then you're good

Yeah like how the Shaun Bridges Silk Road agent got caught stealing a million worth. But I am sure they will start using services like Chainanalysis to try to track people, it is a public ledger after all.

[aesma]

Outside of the crypto world, most people who want to avoid taxes don't actually avoid all taxes. They just hide part of their earnings. That would be my strategy with crypto, with the added advantage that you can easily store cryptos on paper wallets without needing intermediaries, aside from coin mixers. So basically buying stuff directly in crypto when possible, converting through an exchange or ATM other times, and paying the necessary taxes on those transactions. If you're very careful to separate those two ways of doing things, you should be good.

Hide those paper wallets well, though. If they're as easy to find as wads of cash under your mattress, that's not good.

A rich girl in my country just caused her parents a lot of grief by getting caught with drugs on her. The police raided her home, meaning her parents' home. They didn't find more drugs, but they found millions of euros in undeclared cash !

[SUDARMONO]

in my country also not so interested in bitcoin because it is considered not as a means of payment, maybe the situation in my country is not so far different from your country about bitcoin and I do not think my country can track him about the bitcoin profit transactions I have.

[SamsungBitcoin]

in my country also not so interested in bitcoin because it is considered not as a means of payment, maybe the situation in my country is not so far different from your country about bitcoin and I do not think my country can track him about the bitcoin profit transactions I have.

I think for now bitcoin is not too popular in your country but time will comes that more peoplw will discover and earn in bitcoin the most important is you have an advantage to them which is you are earning right now and able to collect more bitcoin than them.
Here in my country lots of people are earning in bitcoin, here in my family me and my wife are earning with bitcoin and lots of our friends and best thing bitcoin is not regulated by the government that is why all our income has no tax.

[Anfisman]

Here in my country which is now an upcoming tiger economy (though we are still classified as a third-world country), we are free to participate in Bitcoin both buying and selling as the government is treating Bitcoin just like any other foreiign money.

However, I am sure that only a very, very small fraction of us are declaring our Bitcoin income. It seems to me that the government is not that interested to get strict with individuals as long as they can tax the Bitcoin exchange provider for the service rendered.

I am then wondering the situation with other countries. Can your government really be able to track if you never declared gains made from Bitcoin transactions?

today In my country there are many people join with bitcoin, among of them make bitcoin as extra income, but some even make it as the primary job and really main income of them only comes from bitcoin. This happens because they think bitcoin to give something bigger than their work. and when we talk about taxes, for now there is still no official regulation from the government that regulates the bitcoin circulation in my country, so bitcoin is currently still free from the tax.

[christian07]

Here in my country which is now an upcoming tiger economy (though we are still classified as a third-world country), we are free to participate in Bitcoin both buying and selling as the government is treating Bitcoin just like any other foreiign money.

However, I am sure that only a very, very small fraction of us are declaring our Bitcoin income. It seems to me that the government is not that interested to get strict with individuals as long as they can tax the Bitcoin exchange provider for the service rendered.

I am then wondering the situation with other countries. Can your government really be able to track if you never declared gains made from Bitcoin transactions?

yes the transaction here in philippines are able to track but no tax in our own money and we dont have problems in exchange with low fee,i think its better also that we have government certification in bitcoin in every country

[Lieldoryn]

Here in my country which is now an upcoming tiger economy (though we are still classified as a third-world country), we are free to participate in Bitcoin both buying and selling as the government is treating Bitcoin just like any other foreiign money.

However, I am sure that only a very, very small fraction of us are declaring our Bitcoin income. It seems to me that the government is not that interested to get strict with individuals as long as they can tax the Bitcoin exchange provider for the service rendered.

I am then wondering the situation with other countries. Can your government really be able to track if you never declared gains made from Bitcoin transactions?

today In my country there are many people join with bitcoin, among of them make bitcoin as extra income, but some even make it as the primary job and really main income of them only comes from bitcoin. This happens because they think bitcoin to give something bigger than their work. and when we talk about taxes, for now there is still no official regulation from the government that regulates the bitcoin circulation in my country, so bitcoin is currently still free from the tax.

In Germany, too, there is no official recognition of bitcoin but this only occurs until you have not purchased the bitcoin to Euro to buy something, this amount is considered your income and you are required to pay the tax. I think the same situation in most countries where there is no outright ban on bitcoin.

[glowing10]

Here in my country which is now an upcoming tiger economy (though we are still classified as a third-world country), we are free to participate in Bitcoin both buying and selling as the government is treating Bitcoin just like any other foreiign money.

However, I am sure that only a very, very small fraction of us are declaring our Bitcoin income. It seems to me that the government is not that interested to get strict with individuals as long as they can tax the Bitcoin exchange provider for the service rendered.

I am then wondering the situation with other countries. Can your government really be able to track if you never declared gains made from Bitcoin transactions?

yes the transaction here in philippines are able to track but no tax in our own money and we dont have problems in exchange with low fee,i think its better also that we have government certification in bitcoin in every country

This is phenomenal that you do not have to pay any tax on income earned from bitcoin. Is that government do not take any tax on income earned form various sources or only it is for bitcoin? I think every country whether legalized or not collect taxes or individual has to pay tax if they fall in respective categories prescribed by govt. in their country.

[Proton2233]

Until we only use bitcoins we are out of reach of tax authorities. Government will long sit as the dog in the manger. To accept bitcoin they can't because to lose power. Not to accept bitcoin, they also can not because the capital to run to where the access is allowed. It is better that black capital work for the country than it will be to support the economy of another country.

[suppersz]

Until we only use bitcoins we are out of reach of tax authorities. Government will long sit as the dog in the manger. To accept bitcoin they can't because to lose power. Not to accept bitcoin, they also can not because the capital to run to where the access is allowed. It is better that black capital work for the country than it will be to support the economy of another country.

Did you guys check out the congress hearing about bitcoin a few months ago? I remember they brought in experts and tried to understand it, then kept asking "How do we regulate it, where is the pressure point??" to which the experts would of course reply "We can't" LOL

[Snaic]

Tracking the profits of a particular citizen from operations with crypto currency is very difficult, almost impossible. However, the investigative authorities for a number of transactions and other indirect evidence, in principle, can in some cases identify a specific person and prove the failure to pay taxes to them. However, this is extremely rare. As a rule, this can not be proved. However, if the data of your purses enter the hands of the investigative authorities, it will be easy. That's why these data must be kept in strict secrecy.

[savushkinTA]

It is difficult to track the indenity of which money comes. No country can do it

[Opquar]

I honestly think taxing citizens' Bitcoin income is basically going to be an honesty system. How are you going to track those coins when everyone can create a different wallet for each transaction? There is an Achilles heel to this system though, and that would be the exchanges. You can easily be taxed by buying or selling through an exchange. Bitcoin isn't accepted everywhere yet so this could be cumbersome.

[TheKeyLongThumbI]

Here in my country which is now an upcoming tiger economy (though we are still classified as a third-world country), we are free to participate in Bitcoin both buying and selling as the government is treating Bitcoin just like any other foreiign money.

However, I am sure that only a very, very small fraction of us are declaring our Bitcoin income. It seems to me that the government is not that interested to get strict with individuals as long as they can tax the Bitcoin exchange provider for the service rendered.

I am then wondering the situation with other countries. Can your government really be able to track if you never declared gains made from Bitcoin transactions?

Yes. I'm sure they can. I've seen sites that can track how many txid addresses are connected to that owner and how much is his total btc.

[reliable]

At the moment the IRS can only monitor bank accounts. So if you never cash out, then you're good

Yeah like how the Shaun Bridges Silk Road agent got caught stealing a million worth. But I am sure they will start using services like Chainanalysis to try to track people, it is a public ledger after all.

This could come in picture going forward as you rightly said its a public ledge. They can create some algorithm and try to find out the amount sent to which address, which address own how much btc etc and then they can track who owns it etc. This may be difficult in beginning but somewhere it could be moved in this direction.

[aesma]

The only way to be safe is to use coin mixers and hope they don't get compromised.

Maybe use several different services in a row.

[Samarkand]

The only way to be safe is to use coin mixers and hope they don't get compromised.

Maybe use several different services in a row.

Even if you use a coin mixer in order to obfuscate the source of your Bitcoins you
still have to face the problem on how to convert the mixed BTC to fiat money.

This step is much more difficult, because exchanges require KYC/AML verification,
localbitcoins and other options to trade in real life are dangerous and not really anonymous
(e.g. you can run into a covert tax investigator). Bitcoin debit cards may be an option,
but even these require KYC/AML verification for midsize amounts.

[kkent]

Here in my country which is now an upcoming tiger economy (though we are still classified as a third-world country), we are free to participate in Bitcoin both buying and selling as the government is treating Bitcoin just like any other foreiign money.

However, I am sure that only a very, very small fraction of us are declaring our Bitcoin income. It seems to me that the government is not that interested to get strict with individuals as long as they can tax the Bitcoin exchange provider for the service rendered.

I am then wondering the situation with other countries. Can your government really be able to track if you never declared gains made from Bitcoin transactions?

If you are depositing unexplained FIAT in a bank account, the government might get involved, even if it is only a few thousand USD-worth per year.