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Author Topic: Can I be taxed?  (Read 4677 times)
JA37
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February 11, 2011, 09:57:51 AM
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Hi.
New user here, been lurking a while but not registered/posted until now.

I have a question about taxing and how easy it is to find me.
I have a few ideas about how to accept bitcoins for a service that I'm thinking about. Nothing big, just a hobby project. Seeing how bitcoins could be exchanged for money I'm sure the government would love to tax me for the bitcoins I make. How easy would it be to find out how many bitcoins was sent to my account? I would generate a new address for each transaction.

Hmm, they'd probably just wait for me to change the bitcoins to $ and tax that when I put it into my bank.
Still, the question stands, is it possible to see which account gets the bitcoins? If I send 100BC to 100addresses, can anyone see that one person got them all?

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Thanks to the anonymous person who doubled my BTC wealth by sending 0.02 BTC to: 1BSGbFq4G8r3uckpdeQMhP55ScCJwbvNnG
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February 11, 2011, 10:00:04 AM
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Hmm, they'd probably just wait for me to change the bitcoins to $ and tax that when I put it into my bank.
Still, the question stands, is it possible to see which account gets the bitcoins? If I send 100BC to 100addresses, can anyone see that one person got them all?

If the coins are all used together in a transaction later on that would give it away.
JA37
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February 11, 2011, 10:07:39 AM
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I don't have any control about which coins I spend so my best bet would be to put it in some sort of mixing service that I read about in the forum a while ago. Am I correct about this?

Thanks for the answer.

Ponzi me: http://fxnet.bitlex.org/?ref=588
Thanks to the anonymous person who doubled my BTC wealth by sending 0.02 BTC to: 1BSGbFq4G8r3uckpdeQMhP55ScCJwbvNnG
ptd
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February 11, 2011, 11:56:57 AM
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I don't have any control about which coins I spend so my best bet would be to put it in some sort of mixing service that I read about in the forum a while ago. Am I correct about this?

It is possible to work out which bitcoins belong to who, but it requires some effort. The IRS (or equivalent) would not be able to cope with the burden.
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February 11, 2011, 12:03:49 PM
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You could have the bitcoins sent to a mybitcoins account, and then transfer it to another bitcoins address of your choice, in segments/installments.

Mybitcoins just use one wallet.dat(as far as I know) and keep all details of your transactions and account with them internally(in a database). This would mean a number of bitcoins come and go from this one wallet(everyone who deposits or withdraws bitcoins from them), and there is no way of knowing that any going out are yours as long as you break up the amount.

For example, you get paid 100btc into a mybitcoin.com account, then in maybe 3 payments of 20btc, 30btc,50btc to your own personal bitcoin address. There would be no way to know that those coins are yours except getting mybitcoin.com's account records.

It's actually a kind of bitcoin laundering. Someone will set up an automated service for this soon enough, if it's not done by the summer then I will set one up, call it bit-laundering.com or something ahahahahahaha

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ColdHardMetal
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February 11, 2011, 12:13:12 PM
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It's actually a kind of bitcoin laundering. Someone will set up an automated service for this soon enough, if it's not done by the summer then I will set one up, call it bit-laundering.com or something ahahahahahaha

It's already here: http://bitcoinlaundry.com/


(not my site)

mikegogulski
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February 11, 2011, 12:28:15 PM
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It's actually a kind of bitcoin laundering. Someone will set up an automated service for this soon enough, if it's not done by the summer then I will set one up, call it bit-laundering.com or something ahahahahahaha

It's already here: http://bitcoinlaundry.com/

(not my site)

Heh, that's mine Smiley

It's simplistic for the moment. No guarantee you won't get the same coins you send, but it does add a bit of complexity to the history of any given coin.

FREE ROSS ULBRICHT, allegedly one of the Dread Pirates Roberts of the Silk Road
Nefario
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February 11, 2011, 01:03:04 PM
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It's actually a kind of bitcoin laundering. Someone will set up an automated service for this soon enough, if it's not done by the summer then I will set one up, call it bit-laundering.com or something ahahahahahaha

It's already here: http://bitcoinlaundry.com/

(not my site)

Heh, that's mine Smiley

It's simplistic for the moment. No guarantee you won't get the same coins you send, but it does add a bit of complexity to the history of any given coin.

1%, isn't that a bit high? But apart from that, yes this is exactly what I was talking about. Thanks for putting up this service, it means I won't have to.

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ribuck
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February 11, 2011, 01:37:15 PM
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1%, isn't that a bit high? ... Thanks for putting up this service, it means I won't have to.

Oh no, Nefario, if you think 1% is too high then you should be very keen to operate your service for 0.9%.
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February 11, 2011, 02:23:45 PM
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Instead of going for 3rd parties & laundering services, i think just send your bitcoins to ur account in mtgotx or any other site that holds bitcoin (sorry i made account, but forgot), also another is witcoin, then delete wallet data. create new wallet data & send ur bitcoins to new address from ur acc., problem solved.

Its very hard for govt to tax you.
I am from India & RBI asked paypal to give interest if some one keeps their money on paypal acc. coz it like bank & paypal have to give interest.
To avoid that paypal sent email to indian users to withdraw their money with in 7 days of arriving it, coz its RBI guidelines.
since bitcoin address are anonymous, it very hard to find to whom u send or from whom u receive.
Until u convert bitcoin to ur bank acc & keep on rotation then govt cant able to know it, so cant tax it.
If govt has to tax u then they have to know u have money.
with an anonymous bitcoin address how can they know & prove its ur address & its ur money?
Ricochet
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February 12, 2011, 09:24:35 AM
 #11

It's actually a kind of bitcoin laundering. Someone will set up an automated service for this soon enough, if it's not done by the summer then I will set one up, call it bit-laundering.com or something ahahahahahaha
It's already here: http://bitcoinlaundry.com/
(not my site)
Heh, that's mine Smiley

It's simplistic for the moment. No guarantee you won't get the same coins you send, but it does add a bit of complexity to the history of any given coin.

There's another one called CoinTumbler at the Onion address: http://lbrmvt4plqojaulx.onion/
NicholasBell
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February 24, 2011, 02:52:18 AM
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I have a question about taxing and how easy it is to find me.
...

But seriously, how can Bitcoin become ubiquitous without dealing with the tax issue? If it ends up displacing USD or whatever currency is in the country of interest, then the government would essentially get no funding because it is nearly impossible for them to figure out who owns which bitcoins, how me depositing to my "savings" wallet is any different from a commercial exchange, and if specific bitcoins are still even "in" the country or not.

Like it or not, at least some taxation is necessary, so I'm trying to see how bitcoin can succeed when the global scope and decentralization makes it practically impossible to tax? (If this information is out there, please let me know. I've pretty much been reading about bitcoins all week and this doesn't seem addressed.)

Tips for helpful/interesting posts? 1FqDDt4w7NzBMg7qoB3GQjdMaPHn6wGhZB
kiba
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February 24, 2011, 02:55:25 AM
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Like it or not, at least some taxation is necessary, so I'm trying to see how bitcoin can succeed when the global scope and decentralization makes it practically impossible to tax? (If this information is out there, please let me know. I've pretty much been reading about bitcoins all week and this doesn't seem addressed.)

So what if it does? Then taxation is not necessary because government as we know it, don't exists. We must reorganize society on a different basis.

For a libertarian, it would seem Utopian, but for everyone else, it seem scary.

Well, a better future is not going to be comfortable and boring, but crazy and scary.

no to the gold cult
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February 24, 2011, 03:02:05 AM
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Like it or not, at least some taxation is necessary, so I'm trying to see how bitcoin can succeed when the global scope and decentralization makes it practically impossible to tax? (If this information is out there, please let me know. I've pretty much been reading about bitcoins all week and this doesn't seem addressed.)

So what if it does? Then taxation is not necessary because government as we know it, don't exists. We must reorganize society on a different basis.

For a libertarian, it would seem Utopian, but for everyone else, it seem scary.

Well, a better future is not going to be comfortable and boring, but crazy and scary.

Don't mean to be rude, but do you have kids?

I don't, but if/when I do, I won't be wanting crazy and scary. I want the world get more just, to be more stable, and.. you know, happier.

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kiba
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February 24, 2011, 03:05:19 AM
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Don't mean to be rude, but do you have kids?

I don't, but if/when I do, I won't be wanting crazy and scary. I want to the world get more just, to be more stable, and.. you know, happier.

Crazy and scary does not mean 'dangerous'. By the time we reach that stage, it will be "normal". Of course, today's audience would think it is crazy and scary.

If people knows what's going on in the 21st century 100 years ago, they would think it is the wildest and craziest story imaginable.

error
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February 24, 2011, 03:55:19 AM
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If people knows what's going on in the 21st century 100 years ago, they would think it is the wildest and craziest story imaginable.

That reminds me of what is quite possibly the first apocalyptic sci-fi story ever written, The Last Man by Mary Shelley, who also wrote Frankenstein. First published in 1826, it envisions the years 2073 onward. What's amazing is that they could not possibly have imagined what has taken place between then and now! So, too, we can only barely comprehend what might happen in the next 250 years, but the people of that time will regard us as living primitive lives.

15UFyv6kfWgq83Pp3yhXPr8rknv9m6581W
matonis
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March 13, 2011, 12:10:25 PM
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I have a question about taxing and how easy it is to find me.
...

But seriously, how can Bitcoin become ubiquitous without dealing with the tax issue? If it ends up displacing USD or whatever currency is in the country of interest, then the government would essentially get no funding because it is nearly impossible for them to figure out who owns which bitcoins, how me depositing to my "savings" wallet is any different from a commercial exchange, and if specific bitcoins are still even "in" the country or not.

Like it or not, at least some taxation is necessary, so I'm trying to see how bitcoin can succeed when the global scope and decentralization makes it practically impossible to tax? (If this information is out there, please let me know. I've pretty much been reading about bitcoins all week and this doesn't seem addressed.)

The bitcoin economy will grow and prosper precisely because it has the potential to facilitate a parallel economy that can also operate beyond the scope of taxation. All types of transactions will be attracted to a taxation-free zone because throughout history no- to low-tax zones have always thrived against their counterparts (Hong Kong, US in the 1800s).  This parallel economy will know no political borders so it will not even be clear which taxation authority has the jurisdiction over the economic participant(s).

Even if the proper jurisdictional taxation entity could be reasonably determined, they would still be faced with applying a tax to a reusable proof-of-work 'puzzle'. Firstly, how do you tax a mathematical puzzle without giving it monetary legitimacy?  How do you determine the political borders of the recipient key (if recipient is careful)?  How do you determine the total amount to tax if bitcoin laundries and mixers are used?  Today, an individual can work for bitcoin in anonymous fashion from an undetected geographic location and then spend bitcoin or anonymously trade out of bitcoin.  I don't really see that changing. I'd be more worried about an authoritarian shutdown of the IRC network.

Founding Director, Bitcoin Foundation
I also cover the bitcoin economy for Forbes, American Banker, PaymentsSource, and CoinDesk.
matonis
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March 13, 2011, 12:14:40 PM
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There's another one called CoinTumbler at the Onion address: http://lbrmvt4plqojaulx.onion/

Server Not Found error on the onion address.  Is that correct address?

Founding Director, Bitcoin Foundation
I also cover the bitcoin economy for Forbes, American Banker, PaymentsSource, and CoinDesk.
barbarousrelic
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March 13, 2011, 12:17:20 PM
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I have a question about taxing and how easy it is to find me.
...

But seriously, how can Bitcoin become ubiquitous without dealing with the tax issue? If it ends up displacing USD or whatever currency is in the country of interest, then the government would essentially get no funding because it is nearly impossible for them to figure out who owns which bitcoins, how me depositing to my "savings" wallet is any different from a commercial exchange, and if specific bitcoins are still even "in" the country or not.

Like it or not, at least some taxation is necessary, so I'm trying to see how bitcoin can succeed when the global scope and decentralization makes it practically impossible to tax? (If this information is out there, please let me know. I've pretty much been reading about bitcoins all week and this doesn't seem addressed.)
It is no easier to avoid taxes using Bitcoin than using cash.

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
Anonymous
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March 13, 2011, 12:51:34 PM
 #20


I have a question about taxing and how easy it is to find me.
...

But seriously, how can Bitcoin become ubiquitous without dealing with the tax issue? If it ends up displacing USD or whatever currency is in the country of interest, then the government would essentially get no funding because it is nearly impossible for them to figure out who owns which bitcoins, how me depositing to my "savings" wallet is any different from a commercial exchange, and if specific bitcoins are still even "in" the country or not.

Like it or not, at least some taxation is necessary, so I'm trying to see how bitcoin can succeed when the global scope and decentralization makes it practically impossible to tax? (If this information is out there, please let me know. I've pretty much been reading about bitcoins all week and this doesn't seem addressed.)

They will have  a hard time paying for bombs if they are spending all their time begging for donations. Thats a good thing. I like seeing politicians beg from us rather than the other way around.
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