2013-08-09 Politico - Bitcoin: Tax haven of the future

[Arvicco]

http://www.politico.com/story/2013/08/bitcoin-tax-haven-95420.html?hp=t1

WHO NEEDS A CAYMAN ACCOUNT WHEN YOU’VE GOT BITCOIN? The US has been leading a global movement to crack down on tax evasion but as our own Lauren French reports, they may not be keeping up with the digital future of tax cheats: Bitcoin. The digital currency has been mocked and maligned by most mainstream economists but it is a growing economic force online. Users don’t need a bank account to begin investing and the currency can be used at a growing number of online retailers.

And that’s what makes it so tricky.

“The problem for government coffers: There’s no mechanism to ensure that people who make money through such digital currency report the income to the Internal Revenue Service,” French reports. “In its fight against tax evasion, the U.S. is largely focused on shining a light into bank accounts held by Americans in other countries. But experts say the rise of Bitcoin, which doesn’t require a bank account, could force the U.S. to rethink its approach.”

Seems like a good article but it's behind a paywall... Anyone has a Politico Pro subscription to extract and repost it?

EDIT: reposted the link that goes around a paywall...

[zoinky]

Tax heaven, or haven?

[Kluge]

Tax heaven, or haven?

Is there a difference?

Bitcoin's an attractive option for tax cheats, but really anything not involving a bank, CU, or legal payment processor (like Dwolla) is the analog equivalent in this regard. Nothing new. Governments' only defense is unenforceable rules on how much physical cash may be used in a transaction, and having "large" bank withdrawals and deposits require the bank file a SAR. If you are committed to cheating, though, just skip the bank (or put only a fractional amount in the bank) and stick to physical cash, Bitcoins, PMs, or whatever.

[westkybitcoins]

Website paywalls: preventing new readership and killing your revenue deader than ever.

[marcus_of_augustus]

tax cheats ... govt. wasters ... IRS bullies ... it's all labels, smears and innuendo isn't it? No room for reason.

[Arvicco]

Repost link without a paywall: http://www.politico.com/story/2013/08/bitcoin-tax-haven-95420.html?hp=t1

[2dogs]

Well, I'm surprised it took this long for .gov to try and make BTC a tax magnet.

[gmaxwell]

"There’s no mechanism to ensure that people who make money through such digital currency report the income to the Internal Revenue Service"

:-/

There's no mechanism to ensure that people who make money through CASH report the income to the Internal Revenue Service... and yet the world continues on just fine.

Generally law enforcement in free societies is accomplished via sampling and stiff penalties for cheating... not some crazy panopticon of ubiquitous surveillance. There are places where Bitcoin creates some different challenges, taxation isn't one of them.

[sunnankar]

tax cheats ... govt. wasters ... IRS bullies ... it's all labels, smears and innuendo isn't it? No room for reason.

I was slightly annoyed at the direction she took the article. But overall I think it is very positive for Bitcoin because it is a great marketing piece to a very critical target market and sat on Politico's homepage for the whole weekend when that target market has some free time to do some fun reading.

For example, as the International Consortium of Investigative Journalists revealed with a Wikileaks cable-like dump of 2.5+ million files it is politicians and regulators who have the most demand for offshore bank accounts. Silk Road has been some low hanging fruit in terms of customer acquisition but it is the regulators and politicians, a prime and critical target market, who will be extremely beneficial for driving mainstream Bitcoin adoption.

If the politicians and regulators view Bitcoin as the ultimate offshore bank account and start acquiring bitcoins where they start getting a vested interest and develop a positive bias then they will be more likely to want to use their power to legitimize it within the current financial system so that they can protect their nesteggs and ill-gotten gains.

[justusranvier]

For example, as the International Consortium of Investigative Journalists revealed with a Wikileaks cable-like dump of 2.5+ million files it is politicians and regulators who have the most demand for offshore bank accounts. Silk Road has been some low hanging fruit in terms of customer acquisition but it is the regulators and politicians, a prime and critical target market, who will be extremely beneficial for driving mainstream Bitcoin adoption.

The US and Europe are primed to reenact the breakup of the USSR. Just before the Big Lie falls apart, insiders at all levels of the political system start looting the treasury for everything they can get their hands on and stash their gains somewhere else. As soon as the looting is complete they disband the government, repudiate their debts and unfunded obligations, and form a "new" one (different name, same assholes in charge).

It's part of the natural life cycle of governments.

[marcus_of_augustus]

For example, as the International Consortium of Investigative Journalists revealed with a Wikileaks cable-like dump of 2.5+ million files it is politicians and regulators who have the most demand for offshore bank accounts. Silk Road has been some low hanging fruit in terms of customer acquisition but it is the regulators and politicians, a prime and critical target market, who will be extremely beneficial for driving mainstream Bitcoin adoption.

If the politicians and regulators view Bitcoin as the ultimate offshore bank account and start acquiring bitcoins where they start getting a vested interest and develop a positive bias then they will be more likely to want to use their power to legitimize it within the current financial system so that they can protect their nesteggs and ill-gotten gains.

 Sad, funny and all too true. Let's get more of these "ultimate" money hidey-hole articles out there to the politicos ... 


gmaxwell: "Generally law enforcement in free societies is accomplished via sampling and stiff penalties for cheating... not some crazy panopticon of ubiquitous surveillance"    gotta remember this, excellent and succinct summary describing how law enforcement has gone completely off the rails.

[Carlton Banks]

No brain wallet mentions in this alleged tax evasion story. I've said this once already: as soon as there is a reported example of someone refusing to give up ill gotten BTC gains from a brain wallet, I think there could be a seriously widespread penny dropping situation. "Money 2.0" or "Money squared" are more or less inevitable headlines.