[2018-08-24] IRS Tracking Bitcoiners with Chainalysis

[CryptoBry]

According to a contract recently obtained by the Daily Beast, the IRS can now track bitcoin and other cryptocurrency addresses. They can do this to route out potential tax evaders. They purchased software from the blockchain analysis group Chainalysis.

The document details that “criminals” have used digital currencies to launder money, deal drugs, and commit other unlawful behavior. However, criminals have also been using digital currencies to ignore tax liabilities and evade responsibility.

The reason the IRS is cracking down on digital currencies appears to be because only 802 people declared bitcoin profits or losses in 2015. The Daily Beast article suggests that many people may have not expected the IRS to collect on digital currencies. Others may have just thought they could easily sidestep this alleged obligation.

The Source is here.

I think the message here is always this: Pay your taxes and things will be all right! As a citizen of the land, we have to make sure that we are declaring and paying the correct taxes because the government can get to so creative in making sure that we do. So there is now a way for IRS to track people who are not paying the tax for their Bitcoin income.

I would not wonder if soon there would be many cases that the IRS will file against people who failed to pay their taxes. I am then lucky because I am not a USA citizen and I belong to a country which is not yet that strict when it comes to taxes for Bitcoin transactions (though we are paying the tax without us knowing it because those are usually added by the wallet providers).
 

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[HeRetiK]

I think the message here is always this: Pay your taxes and things will be all right! As a citizen of the land, we have to make sure that we are declaring and paying the correct taxes because the government can get to so creative in making sure that we do. So there is now a way for IRS to track people who are not paying the tax for their Bitcoin income.

To me it also looks like yet another indicator of Bitcoin gaining legitimacy. No more flying under the radar, we're on public display now.

It will be interesting to see what this will mean for currencies with built-in mixing properties such as XMR. At one point alts like these may reach a size where the IRS can't simply ignore them.

[Kprawn]

I am not totally against it... Give the government their share {even if you believe that they do not deserve it or using it in the

wrong way} and you know you would be sleeping like a baby. No worries that the authorities will break down your door in the

middle of the night to confiscate your remaining coins and also to jail you for tax evasion. We ALL hate paying our taxes, but

it is the law. 

Even if the Chainalysis software fail, the IRS could still do a financial audit on you and you will have to explain your wealth.

[no0dlepunk]

I think the message here is always this: Pay your taxes and things will be all right!

Yes, yes, yada yada... My advice is to not cash your bitcoins unless you need to. Keep it in BTC, the government could not tax it because you haven't sold it yet. I have a strong feeling that mi amigo CryptoBry and me are in the same country... we don't pay taxes here for crypto but I guess sooner or later we will.

By the way, there is nothing wrong with paying taxes, but it feels good not to 

[BitFinnese]

I think the message here is always this: Pay your taxes and things will be all right! As a citizen of the land, we have to make sure that we are declaring and paying the correct taxes because the government can get to so creative in making sure that we do. So there is now a way for IRS to track people who are not paying the tax for their Bitcoin income.

To me it also looks like yet another indicator of Bitcoin gaining legitimacy. No more flying under the radar, we're on public display now.

It will be interesting to see what this will mean for currencies with built-in mixing properties such as XMR. At one point alts like these may reach a size where the IRS can't simply ignore them.

I agree, government getting interested on bitcoin users tax simply means, government is acknowledging bitcoin, even though they do that to book some funds for the country.  It is always a positive thing to be approved and considered by the government legitimate, this remove doubt of people to bitcoin and users will get aware of it and will not worry if they are going to venture in Bitcoin economy since government knows and acknowledge bitcoin.

[Rahar02]

Well, bitcoin is just one of many options to do illegal things but I don't like the idea of paying taxes from what you've got.
It seems like a game to avoid taxes for bitcoiners in USA, they have to report how much profits that they have made and IRS want a piece of cake from them. For now they could use monero or zcash, ooh that's why zcash price increase significantly in the last few months. IRS can't track down everyone in cryptocurrencies, people just have to avoid exchanges and divide their money into several addresses, done.

[monocolor]

Well you pay taxes when you sell and have a gain, you don't pay tax by holding bitcoins.

[TravelMug]

I think the message here is always this: Pay your taxes and things will be all right! As a citizen of the land, we have to make sure that we are declaring and paying the correct taxes because the government can get to so creative in making sure that we do. So there is now a way for IRS to track people who are not paying the tax for their Bitcoin income.

To me it also looks like yet another indicator of Bitcoin gaining legitimacy. No more flying under the radar, we're on public display now.

It will be interesting to see what this will mean for currencies with built-in mixing properties such as XMR. At one point alts like these may reach a size where the IRS can't simply ignore them.

I agree, government getting interested on bitcoin users tax simply means, government is acknowledging bitcoin, even though they do that to book some funds for the country.  It is always a positive thing to be approved and considered by the government legitimate, this remove doubt of people to bitcoin and users will get aware of it and will not worry if they are going to venture in Bitcoin economy since government knows and acknowledge bitcoin.

I disagree. they are just interested because they want to collect taxes from those not paying it. And once it becomes "legitimate" then will still get a hand on it. That is why don't like government messing in crypto world. So whether its legal or illegal is still the same.

When we start to pay government taxes then bitcoin will not be decentralized anymore. I'm not saying that we don't like paying taxes, but I think its what we like about bitcoins design. I guess I just hold my coins for really longer time time and will not convert it to fiat or just mix it to somewhat make it hard from them identifying individuals.

[Karartma1]

@Cryptobry
Please format the subject of this thread, the date is wrong: we are not in 2018...yet.

Double check before posting!