[2019-06-15] IRS turning its attention to recreational bitcoin investors

[bbc.reporter]

This is what the IRS does very well. Making criminals of innocent people like you.

In any case, this is also what Monero, Aeon and Grin will do best. Helping innocent people hide from people who want to make criminals out of you hehehe.



The Internal Revenue Service has a message it wants to get out to recreational bitcoin investors who think they can dodge taxes on their cryptocurrency gains — it knows what’s going on, and people won’t be able to get away with it for long.

Gary Alford, the IRS special agent who gained national attention for helping solve the Silk Road online drug trafficking case that led to the 2013 arrest of kingpin Ross Ulbricht, spoke at a panel in New York hosted by global accounting firm EisnerAmper about the tax consequences of cryptocurrencies. Now a cyber-crime coordinator for the IRS, Alford said his agency is ready to start moving past sensational money laundering cases and into more routine enforcements of tax law involving cryptocurrencies.

Speaking from a seat in front of a luxurious fireplace at the Columbus Citizens Foundation townhouse on Manhattan’s Upper East Side, Alford said:

“We’re usually behind the curve — history is made and then we react to it. But in this case, we are ahead of the curve. We were there on ground zero, and we were waiting for the rest of the world to catch up to what we already knew… We already are aware that there were cases to be made, we just didn’t know if we were at the point where we can bring it for criminal prosecution. We believe we are at that point now. If we had 12 jurors and told them someone made all their money in bitcoin, we believe that they would understand.”

Read in full https://www.forbes.com/sites/hanktucker/2019/06/13/irs-agent-who-took-down-silk-road-turns-his-attention-to-recreational-bitcoin-investors/amp/

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[figmentofmyass]

when it rains, it pours. the SEC is putting the screws to altcoin exchanges, FATF is pushing for not only mandatory KYC but transaction reporting > $1000, and now the IRS is coming after "recreational bitcoin investors"? as a USA resident, this a rude awakening.

apparently they are also publishing new tax guidance this month or next:

Alford, EisnerAmper tax partner Walter Pagano and moderator Dara Albright, a digital finance consultant, clarified existing regulations and discussed what the IRS still needs to resolve when it releases new guidance for cryptocurrencies in late June or July.

[o_e_l_e_o]

The US already have some of the most ridiculous crypto related tax laws in the world, requiring every single trade, even trades between coins which have nothing to do with USD, to be classed as a taxable event. If the IRS genuinely starts pulling up average folks on this, very few people are going to be able to provide all the details they want - a complete history of all deposits, buys, trades, sells, and withdrawals, what volumes, at what prices, etc. Any coins earned from ICOs, airdrops, faucets, campaigns, etc., all need to be fully accounted for as well.

The US government is very much leading the charge globally on clamping down on individual freedoms. If it affects their tax revenue, it's in their sights.

[Lucius]

I'm not a trader and I'm not from the US, but it's hard to imagine that someone can keep such records especially if it trades on a daily basis. I do not question the payment of taxes, but such regulations seem to me more than just tax collection, it seems more like placing unpredictable obstacles in order to discourage those who in any way earn from cryptocurrency.

Considering influence of USA on many countries, it is possible that some other countries will also take over part of their regulations, the only question is whether they do it voluntarily or under pressure.

[Vishnu.Reang]

I'm not a trader and I'm not from the US, but it's hard to imagine that someone can keep such records especially if it trades on a daily basis. I do not question the payment of taxes, but such regulations seem to me more than just tax collection, it seems more like placing unpredictable obstacles in order to discourage those who in any way earn from cryptocurrency.

Considering influence of USA on many countries, it is possible that some other countries will also take over part of their regulations, the only question is whether they do it voluntarily or under pressure.

Well.. knowing how pesky the IRS can get, I would advice everyone to pay the taxes which are due on any trade from cryptocurrency. It is not that difficult to get the data on daily trade from the exchanges. And even better, some of the exchanges would even calculate the tax liability for you. I am not a big fan of paying taxes... but a confrontation is not something that we need right now.

[1Referee]

Well.. knowing how pesky the IRS can get, I would advice everyone to pay the taxes which are due on any trade from cryptocurrency. It is not that difficult to get the data on daily trade from the exchanges. And even better, some of the exchanges would even calculate the tax liability for you. I am not a big fan of paying taxes... but a confrontation is not something that we need right now.

Agreed. If you're using a centralized exchange and make gains, then definitely make sure to pay due taxes because it's not worth it to later have the IRS point you at it (and when they point you at it they don't do it in a friendly manner).

I have a speculative stack of ~10% and a hodl stack of ~90%. My hodl stack hasn't touched an exchange in years and won't be doing so in the forthcoming years. I'm not going to pay one single penny in tax over my hodl stack. My speculative stack is where I do pay tax over the gains and whatnot. It sucks, but there is nothing that can be done against it as long as you keep speculating on centralized exchanges.

[buwaytress]

It's really strange to see these developments while at the same time the various states are also making it in the news on the other end of the spectrum. Rhode Island I think I saw yesterday and then today Nebraska putting out all their blockchain-friendly laws. I can't really see how the states can encourage on one end while the fed government on the other tried to shutter. One day they'll be going after Bitcoin nodes.

[gentlemand]

What does your level of recreationalness have to do with the amount of tax you're supposed to cough up?

You can be luxurious, fur lined and casual and still run up a trillion dollar tax bill. Just because you did it while watching TV at the same time does not make it magically invisible.

[BitHodler]

One day they'll be going after Bitcoin nodes.

I think that may be playing a role when either LN gets integrated in full node clients, or features similar to coinjoin. They need a reason to attack nodes, and right now I'm happy to say that they don't have it yet.

US based users have always been hit harder than users from most other countries and that on several fronts, especially those in New York. The regulations businesses are subject to to serve users in New York is just retarded.

I hope this will stimulate to have more exchanges format and calculate what people owe in tax. Most users don't seem to have much experience with tax reports so there is a high probability that they mess up somewhere.

[squatter]

I think that may be playing a role when either LN gets integrated in full node clients, or features similar to coinjoin. They need a reason to attack nodes, and right now I'm happy to say that they don't have it yet.

What kind of attack are we talking about? I would be very surprised if there weren't government adversaries on the network, for the same reason they run TOR exit nodes. They're sniffing for network data like IP addresses to accompany their blockchain analysis efforts. They're working to identify our wallet clusters. The IRS is very interested in identifying our wallets, I'm sure.

[BitHodler]

What kind of attack are we talking about? I would be very surprised if there weren't government adversaries on the network, for the same reason they run TOR exit nodes. They're sniffing for network data like IP addresses to accompany their blockchain analysis efforts. They're working to identify our wallet clusters. The IRS is very interested in identifying our wallets, I'm sure.

Attack as in making it illegal to run a node. It could be on a corporate level where datacenters are no longer allowed to have their clients run them, or on a level where ISPs are cutting off nodes of you and me at home.

And yes, I'm sure there are a wide variety of agencies sniffing around in the network to gather information about money flows, who and where nodes, etc. They probably have been here longer than most people know about Bitcoin.

[bbc.reporter]

Well.. knowing how pesky the IRS can get, I would advice everyone to pay the taxes which are due on any trade from cryptocurrency. It is not that difficult to get the data on daily trade from the exchanges. And even better, some of the exchanges would even calculate the tax liability for you. I am not a big fan of paying taxes... but a confrontation is not something that we need right now.

Agreed. If you're using a centralized exchange and make gains, then definitely make sure to pay due taxes because it's not worth it to later have the IRS point you at it (and when they point you at it they don't do it in a friendly manner).

I have a speculative stack of ~10% and a hodl stack of ~90%. My hodl stack hasn't touched an exchange in years and won't be doing so in the forthcoming years. I'm not going to pay one single penny in tax over my hodl stack. My speculative stack is where I do pay tax over the gains and whatnot. It sucks, but there is nothing that can be done against it as long as you keep speculating on centralized exchanges.

Make gains on what, however. In bitcoins? America does not have a law defining what bitcoin really is. Is it a commodity or a currency?

In any case, this would be one of the reasons to use anonymous coins. Tax evasion hehehe.

[Wayan_Pedjeng]

What does your level of recreationalness have to do with the amount of tax you're supposed to cough up?

You can be luxurious, fur lined and casual and still run up a trillion dollar tax bill. Just because you did it while watching TV at the same time does not make it magically invisible.

You are right, but I think that the OP is hinting that the IRS is going after the small fish while ignoring the whales.

But I agree with you. Tax liabilities don't change whether you are doing crypto-trading for a hobby, or whether you are doing it as a part of your career. Enough loopholes are available in the tax policies, to reduce the amount of taxes that you need to pay. But saying that crypto-trading was your hobby and it was not serious is not a valid excuse.

[1Referee]

Make gains on what, however. In bitcoins? America does not have a law defining what bitcoin really is. Is it a commodity or a currency?

In any case, this would be one of the reasons to use anonymous coins. Tax evasion hehehe.

Trading profits, virtual gains, etc.

It doesn't matter what Bitcoin 'really' is, what matters is that you can always fit it in the appropriate section of your tax form. I used to use the alternative section for that, but now they specifically mention crypto by referring to it as digital currencies like Bitcoin, which is pretty neat. This causes less confusion and makes it clearer as to what section you should select.

I can buy a pair of stinky socks for x amount and sell them for y amount and still be subject to taxation. Anything is pretty much subject to taxation unless stated otherwise.

[buwaytress]

What kind of attack are we talking about? I would be very surprised if there weren't government adversaries on the network, for the same reason they run TOR exit nodes. They're sniffing for network data like IP addresses to accompany their blockchain analysis efforts. They're working to identify our wallet clusters. The IRS is very interested in identifying our wallets, I'm sure.

Attack as in making it illegal to run a node. It could be on a corporate level where datacenters are no longer allowed to have their clients run them, or on a level where ISPs are cutting off nodes of you and me at home.

And yes, I'm sure there are a wide variety of agencies sniffing around in the network to gather information about money flows, who and where nodes, etc. They probably have been here longer than most people know about Bitcoin.

Yeah, by the time we hear about the news, it'll be too late. These guys control the release of information and awareness of their activities. Make no mistake, they want us to know about what they're doing when they want us to know.

As soon as they understand more about Bitcoin, they'll get on that sort of work underway. They probably still want to get their hooks in deep now, so won't make running nodes illegal just yet. Once they're sure they can kill it, or even takeover them, you can be sure they'll try.

[pixie85]

At times like this I'm so happy that I don't live in the US.

and people won’t be able to get away with it for long.

This looks like a hint that they are still trying to set up the surveillance and those who didn't pay their crypto taxes in the last 10 years are fine

If I were a US trader I'd start packing before they get comfortable with tracing transactions and wallets and connecting them with names.

[squatter]

At times like this I'm so happy that I don't live in the US.

and people won’t be able to get away with it for long.

This looks like a hint that they are still trying to set up the surveillance and those who didn't pay their crypto taxes in the last 10 years are fine

If I were a US trader I'd start packing before they get comfortable with tracing transactions and wallets and connecting them with names.

There's probably still lots of lower hanging fruit they can go after. Proving cases with wallet analysis and non-KYC services is going to be much more challenging in a jury trial than Coinbase users who made 5-7 figure profits trading over years and never paid their taxes. From the statistics the IRS released about Bitcoin capital gain reporting vs. the number of high volume Coinbase users, there are lots of people relying on the notion that the IRS won't audit them.

[Theb]

I do consider this just a friendly reminder fo their U.S. citizens planning to invest in the crypto industry as from what I recall they already have some control in wallets and exchanges like Coimbase and Binance in the country. I have read news before that the crypto exchanges do submit “random” trade transactions from their citizens as well as alert them when a certain threshold has been hit. This may look like a bad news but taxes are taxes and we do have to pay them, we might as well pay them before some crazy regulation happens.

[o_e_l_e_o]

There's probably still lots of lower hanging fruit they can go after. Proving cases with wallet analysis and non-KYC services is going to be much more challenging in a jury trial than Coinbase users who made 5-7 figure profits trading over years and never paid their taxes. From the statistics the IRS released about Bitcoin capital gain reporting vs. the number of high volume Coinbase users, there are lots of people relying on the notion that the IRS won't audit them.

We've known this was coming for a while now. Last year, Coinbase handed over to the IRS the details of 13,000 USA users who were holding greater than $20,000 in assets on the exchange. The IRS had initially demanded the details of almost half a million users, but Coinbase challenged it in court and the final number affect was around 13,000. Anyone who thought the IRS were just going to accept that defeat and move on was living in a fantasy land.

If you have completed KYC procedures on Coinbase (or any other major exchange for that matter), expect that sooner or later your details are going to passed to your government. If you haven't been paying your taxes, now is the time to rectify that before they come knocking on your door, so to speak.

[bbc.reporter]

Make gains on what, however. In bitcoins? America does not have a law defining what bitcoin really is. Is it a commodity or a currency?

In any case, this would be one of the reasons to use anonymous coins. Tax evasion hehehe.

Trading profits, virtual gains, etc.

It doesn't matter what Bitcoin 'really' is, what matters is that you can always fit it in the appropriate section of your tax form. I used to use the alternative section for that, but now they specifically mention crypto by referring to it as digital currencies like Bitcoin, which is pretty neat. This causes less confusion and makes it clearer as to what section you should select.

I can buy a pair of stinky socks for x amount and sell them for y amount and still be subject to taxation. Anything is pretty much subject to taxation unless stated otherwise.

What gains? There are no gains until you sell any cryptocoin for fiat later. Does the American government tax people for paper gains from holding stocks. I reckon no government does, but correct me.

Also, will they give tax breaks to people who lost money in the cryptospace hehehe?

[o_e_l_e_o]

What gains? There are no gains until you sell any cryptocoin for fiat later. Does the American government tax people for paper gains from holding stocks.

The IRS says that trading a cryptocurrency for another cryptocurrency is a taxable event, even if the trade never touched fiat in any way. If you are using BTC to day trade an altcoin, or using a stable coin like USDT to day trade BTC, every single buy/sell/trade needs to be declared and have tax paid on it based on the market value in USD at the time of the trade.

If overall you lost money in a financial year from trading crypto, you can file those losses to offset taxes you will pay on other income.

[bbc.reporter]

@o_e_l_e_o. Would trading baseball cards for basketball cards among sports enthusiasts then also be a taxable event? For the lack of laws defining cryptocoins, I reckon they can only be something similar to collectibles.

[Sithara007]

@o_e_l_e_o. Would trading baseball cards for basketball cards among sports enthusiasts then also be a taxable event? For the lack of laws defining cryptocoins, I reckon they can only be something similar to collectibles.

Well... this is a very good point.

I have no issues in case the government is taxing the profits from crypto-to-fiat conversion. They can even implement VAT or GST over fiat-to-crypto conversion as well. But what about selling one crypto to purchase another cryptocurrency? This is taxable in some of the territories and in ideal case there should not be any tax burden on such trades. Then another difficult question arises. What about selling crypto to Tether or other stablecoins? I would say that Tether is just another crypto and it should not be taxed.

[DebitMe]

Is there interest in a licensed CPA to complete your tax returns that involve crypto? I have thought about this for awhile, but I am not sure if it is a service that people would be interested in or not? I also think there could be a market for just general advice or knowledge on how to handle different situations, basically paying a fee to have a CPA on call for any crypto tax questions.

[o_e_l_e_o]

Would trading baseball cards for basketball cards among sports enthusiasts then also be a taxable event?

Yes:

You must include in gross income in the year of receipt the fair market value of goods or services received from bartering.

Generally the view is that if you barter, swap, or trade, any goods or services, for tax purposes it should be treated as two separate trades - first you initially sell your good for x dollars, and then you immediately buy the other good in question for the same amount. You then have to pay tax on the money received on the initial sell. This is can be complicated further by how much profit you made from selling the original good, how much the price changed while you owned it, how long you have owned it for, etc.

I have no doubt swaps and trades happen all the time without people paying tax on them, but as far as the IRS are concerned, they want their cut even if no cash is involved. Crypto is no different.

[Kakmakr]

America are ready to go to war again and wars are expensive, so the IRS must find new ways to fund the war. < We already saw 1000s of soldiers being deployed to the Middle East again > 

The IRS are helping to fund these wars and the people who thought that they can escape death & taxes, will soon face that reality. I pay my taxes, because I know tax evasion is a criminal offense in my country and I am too busy making money to have to waste my time in jail. 

Pay the damn taxes and be done with it. 

[bbc.reporter]

Would trading baseball cards for basketball cards among sports enthusiasts then also be a taxable event?

Yes:

You must include in gross income in the year of receipt the fair market value of goods or services received from bartering.

Generally the view is that if you barter, swap, or trade, any goods or services, for tax purposes it should be treated as two separate trades - first you initially sell your good for x dollars, and then you immediately buy the other good in question for the same amount. You then have to pay tax on the money received on the initial sell. This is can be complicated further by how much profit you made from selling the original good, how much the price changed while you owned it, how long you have owned it for, etc.

I have no doubt swaps and trades happen all the time without people paying tax on them, but as far as the IRS are concerned, they want their cut even if no cash is involved. Crypto is no different.

Ok, can I pay them from my collection of NBA basketball cards? There was no cash in the exchange, only cards. If they tax for example they tax me 10% for a trade, will they accept a 10% portion of the card?

I reckon this is a government in desperation. It cannot do anything to the cryptospace except lockdown on users on exchanges that have KYC. What can the government do if you personally give me bitcoin for an altcoin?

[figmentofmyass]

Ok, can I pay them from my collection of NBA basketball cards? There was no cash in the exchange, only cards. If they tax for example they tax me 10% for a trade, will they accept a 10% portion of the card?

even if bartering is your only source of income, the IRS expects you to pay your taxes in USD. this is why people always speculate about bitcoin selling off as we approach tax day in april every year. the assumption is that people need cash to pay their taxes, so they sell coins.

What can the government do if you personally give me bitcoin for an altcoin?

they can't enforce anything in p2p situations. but that's not who they are coming after. they are going after the low hanging fruit---people who trade on exchanges and give up their KYC but still don't pay their taxes.

[o_e_l_e_o]

Ok, can I pay them from my collection of NBA basketball cards? There was no cash in the exchange, only cards. If they tax for example they tax me 10% for a trade, will they accept a 10% portion of the card?

It doesn't matter if there was no cash in the exchange, and it doesn't matter if you trade something for something of an exactly equal value. It doesn't even matter if you trade a pristine Exquisite Collection LeBron James card for a completely identical pristine Exquisite Collection LeBron James card. For the purposes of tax, you sold one for USD, realized a gain in USD on the sale, and then bought the other one for the exact same price in USD. You have to pay taxes in USD on your realized USD gains.

I reckon this is a government in desperation. It cannot do anything to the cryptospace except lockdown on users on exchanges that have KYC. What can the government do if you personally give me bitcoin for an altcoin?

I agree with you, I'm just stating the rules the IRS have issued. Any trade from crypto to crypto, even without touching fiat, is a taxable event if you are a US citizen.

[DebitMe]

Ok, can I pay them from my collection of NBA basketball cards? There was no cash in the exchange, only cards. If they tax for example they tax me 10% for a trade, will they accept a 10% portion of the card?

It doesn't matter if there was no cash in the exchange, and it doesn't matter if you trade something for something of an exactly equal value. It doesn't even matter if you trade a pristine Exquisite Collection LeBron James card for a completely identical pristine Exquisite Collection LeBron James card. For the purposes of tax, you sold one for USD, realized a gain in USD on the sale, and then bought the other one for the exact same price in USD. You have to pay taxes in USD on your realized USD gains.

I reckon this is a government in desperation. It cannot do anything to the cryptospace except lockdown on users on exchanges that have KYC. What can the government do if you personally give me bitcoin for an altcoin?

I agree with you, I'm just stating the rules the IRS have issued. Any trade from crypto to crypto, even without touching fiat, is a taxable event if you are a US citizen.

To take it beyond that, the IRS has explicitly stated that really anything besides property cannot be exchanged tax free. There used to be a loop hole around what BBC was saying whereby it could possibly be deemed a like kind exchange (still needs to be reported which I am sure no one did so still against the law), but that was closed and explicitly stated as only applying to real estate.

[timerland]

This is what the IRS does very well. Making criminals of innocent people like you.

The Internal Revenue Service has a message it wants to get out to recreational bitcoin investors who think they can dodge taxes on their cryptocurrency gains — it knows what’s going on, and people won’t be able to get away with it for long.

Instead of this, wouldn't a better use of their resources and time better directed to investigating certain multibillion and transnational companies for their tax evasion behavior? But of course, they'd like to target everyday Joes instead, with extremely tough tax codes that are hard to understand for specific circumstances.

It comes across like that they're trying to use some sort of scare tactic here, because they know that the enforce-ability of tracing all transactions over the blockchain, especially for anonymous blockchains, is quite hard. They can only track people effectively really through regulated channels.

Of course, you should lodge your capital gains, and I do believe that given the maturation of the tax code in regards to crypto, this increase in investigations in regards to CGT of crypto income will continue to grow. I'm not saying that people should evade tax. But instead of trying to regulate large corporations more effectively, they may be putting resources in the wrong direction.

[o_e_l_e_o]

Instead of this, wouldn't a better use of their resources and time better directed to investigating certain multibillion and transnational companies for their tax evasion behavior?

Absolutely. Go and do an internet search for "*Large corporation name* tax", and see what shows up. Amazon paid zero tax on $11 billion profits. Google move over $20 billion to Bermuda to avoid taxes. Starbucks in Europe paid an effective tax rate of 2.8%, while Apple paid less than 1%. There are billions and billions of dollars in unpaid, avoided, sheltered, and evaded corporation tax, but of course you can't annoy the the companies who have bought out 99% of the politicians. Much easier to go after the average Joe who is trading a couple of hundred or thousand dollars of crypto.

They can only track people effectively really through regulated channels.

Pretty much this. Everyone knows that "cash in hand" jobs are used for tax evasion, but they are still commonplace because they are near impossible to clamp down on. Peer to peer crypto trading is similarly difficult to regulate, provided you aren't using address which are somehow tied to your identity, such as from an exchange you have completed KYC on.

[gentlemand]

Instead of this, wouldn't a better use of their resources and time better directed to investigating certain multibillion and transnational companies for their tax evasion behavior? But of course, they'd like to target everyday Joes instead, with extremely tough tax codes that are hard to understand for specific circumstances.

Those corporations aren't tax evading. They're tax avoiding. They have enough lawyers to know that whatever they pull stands up to scrutiny even if it's offensive. That's perfectly legal and the conditions to foster it are created by legislators in the first place. If it's unintentional then that reflects poorly on their thoroughness.

[PassThePopcorn]

Instead of this, wouldn't a better use of their resources and time better directed to investigating certain multibillion and transnational companies for their tax evasion behavior? But of course, they'd like to target everyday Joes instead, with extremely tough tax codes that are hard to understand for specific circumstances.

Those corporations aren't tax evading. They're tax avoiding. They have enough lawyers to know that whatever they pull stands up to scrutiny even if it's offensive. That's perfectly legal and the conditions to foster it are created by legislators in the first place. If it's unintentional then that reflects poorly on their thoroughness.

As simple as the bold, they have enough lawyers...it's just a PITA to deal with large corporations because even if they are wrong they can make it a long drawn out process where in the end it took more time/effort/money to go after them than the government receives for doing it...
IRS: We are auditing you
Them: Here are a few hundred thousand transactions have fun dealing with them
Lawyers: Here's more BS for you to look through

[DebitMe]

Instead of this, wouldn't a better use of their resources and time better directed to investigating certain multibillion and transnational companies for their tax evasion behavior? But of course, they'd like to target everyday Joes instead, with extremely tough tax codes that are hard to understand for specific circumstances.

Those corporations aren't tax evading. They're tax avoiding. They have enough lawyers to know that whatever they pull stands up to scrutiny even if it's offensive. That's perfectly legal and the conditions to foster it are created by legislators in the first place. If it's unintentional then that reflects poorly on their thoroughness.

As simple as the bold, they have enough lawyers...it's just a PITA to deal with large corporations because even if they are wrong they can make it a long drawn out process where in the end it took more time/effort/money to go after them than the government receives for doing it...
IRS: We are auditing you
Them: Here are a few hundred thousand transactions have fun dealing with them
Lawyers: Here's more BS for you to look through

That's not entirely true. As someone who has handled audits for multi billion dollar companies there are instances where massive excel files are handed over, but that is only when requested as backup. None of these companies are avoiding taxes by making it too hard to audit them. When an audit happens, the IRS sends IDR's of exactly what they want and if you dont provide it in a format they find acceptable, they have no issues requesting more or for you to do the work to summarize it and will access tax based on what they can find if you dont comply.

[squatter]

Those corporations aren't tax evading. They're tax avoiding. They have enough lawyers to know that whatever they pull stands up to scrutiny even if it's offensive. That's perfectly legal and the conditions to foster it are created by legislators in the first place. If it's unintentional then that reflects poorly on their thoroughness.

As simple as the bold, they have enough lawyers...it's just a PITA to deal with large corporations because even if they are wrong they can make it a long drawn out process where in the end it took more time/effort/money to go after them than the government receives for doing it...
IRS: We are auditing you
Them: Here are a few hundred thousand transactions have fun dealing with them
Lawyers: Here's more BS for you to look through

I'm guessing you've never been on the wrong side of government agencies before. You have it backwards. The IRS is happy to have a long drawn out process -- they will add financial penalties all along the way and even threaten you with criminal proceedings and prison time. You can't just drop endless undecipherable papers on the IRS. If you don't provide exactly what they want in the format they require, they will ignore you, say your company is noncompliant, and move forward with enforcement actions against you.

[bbc.reporter]

Instead of this, wouldn't a better use of their resources and time better directed to investigating certain multibillion and transnational companies for their tax evasion behavior? But of course, they'd like to target everyday Joes instead, with extremely tough tax codes that are hard to understand for specific circumstances.

Those corporations aren't tax evading. They're tax avoiding. They have enough lawyers to know that whatever they pull stands up to scrutiny even if it's offensive. That's perfectly legal and the conditions to foster it are created by legislators in the first place. If it's unintentional then that reflects poorly on their thoroughness.

Agreed. Those big corporations also often have the political connections to make some tax avoidance intentional hehehe.

Also, some banks help them evade taxes.

[DebitMe]

Instead of this, wouldn't a better use of their resources and time better directed to investigating certain multibillion and transnational companies for their tax evasion behavior? But of course, they'd like to target everyday Joes instead, with extremely tough tax codes that are hard to understand for specific circumstances.

Those corporations aren't tax evading. They're tax avoiding. They have enough lawyers to know that whatever they pull stands up to scrutiny even if it's offensive. That's perfectly legal and the conditions to foster it are created by legislators in the first place. If it's unintentional then that reflects poorly on their thoroughness.

Agreed. Those big corporations also often have the political connections to make some tax avoidance intentional hehehe.

Also, some banks help them evade taxes.

Dude, stop with the FUD. All tax avoidance is intentional, that is the definition of tax avoidance and there is nothing illegal about it. It is simply using the tax rules to your advantage, anyone can do it.

How do some banks help corporations evade taxes?  Your just spreading nonsense.

[o_e_l_e_o]

All tax avoidance is intentional, that is the definition of tax avoidance and there is nothing illegal about it.

I think his point is that many of these multi-national multi-billion dollar companies spend a not insignificant amount of money lobbying, buying/paying politicians, making "gifts", etc., with the proviso that these politicians will then pass legislation to help them reduce or avoid their taxes. It's not illegal, sure, but it isn't exactly ethical.

How do some banks help corporations evade taxes?  Your just spreading nonsense.

Did you hear of the Panama Papers? Over 500 banks registered over 15,000 shell companies with the one off shore service provider that those documents leaked from. Deutsche Bank has had employees convicted for facilitating almost a billion dollars of tax evasion, with investigations ongoing. UBS was fined over 4 billion dollars for helping clients evade taxes. Santander is under investigation for over 11 billion dollars of suspected tax evasion. The list goes on. The biggest banks in the world frequently help clients to evade taxes.

[Carlton Banks]

America are ready to go to war again and wars are expensive, so the IRS must find new ways to fund the war. < We already saw 1000s of soldiers being deployed to the Middle East again >  

Right, armies all over the world are using (well, borrowing against future) taxes to murder milllons of innocent people over resources
 

The IRS are helping to fund these wars and the people who thought that they can escape death & taxes, will soon face that reality. I pay my taxes, because I know tax evasion is a criminal offense in my country and I am too busy making money to have to waste my time in jail.  

Pay the damn taxes and be done with it.  

how about SELL YOUR FREEDOM MONEY AND BE DONE WITH IT


all of you on this page are a bunch of selfish assholes

satoshi made this so we could use it as a tool against the corruption in this so-called democratic system, and the only thing you can think about is saving your tiny little asses.

pussies, each and every single one of you. You don't deserve the rights Bitcoin gives you, please sell it to someone who values those rights

because if the big-bad government told you to give up 100% of your Bitcoin in taxes, you'd all do it anyway. It threatens their corporate monopoly you idiots, you don't even understand what's going on here

[IconFirm]

how about SELL YOUR FREEDOM MONEY AND BE DONE WITH IT

all of you on this page are a bunch of selfish assholes

satoshi made this so we could use it as a tool against the corruption in this so-called democratic system, and the only thing you can think about is saving your tiny little asses.

pussies, each and every single one of you. You don't deserve the rights Bitcoin give you, please sell it to someone who values those rights

because if the big-bad government told you to give up 100% of your Bitcoin in taxes, you'd all do it anyway. It threatens their corporate monopoly you idiots, you don't even understand what's going on here

You said it Carlton. The idea of what Bitcoin is all about has been lost on most people now, they've become brainwashed by all the Wall St talk of whales, bears, bulls, taxes, laws & all the other corporate BS that spews out on various threads on BCT, especially the press section. People have become so blinded by profit & greed that they've completely forgotten how & why Bitcoin came about in the first place & what it's purpose actually is. They've been offered freedom on a plate but have become too scared to eat it in case they might break some law somewhere, now or in the future.

It's pathetic & sad TBH.

[bbc.reporter]

Instead of this, wouldn't a better use of their resources and time better directed to investigating certain multibillion and transnational companies for their tax evasion behavior? But of course, they'd like to target everyday Joes instead, with extremely tough tax codes that are hard to understand for specific circumstances.

Those corporations aren't tax evading. They're tax avoiding. They have enough lawyers to know that whatever they pull stands up to scrutiny even if it's offensive. That's perfectly legal and the conditions to foster it are created by legislators in the first place. If it's unintentional then that reflects poorly on their thoroughness.

Agreed. Those big corporations also often have the political connections to make some tax avoidance intentional hehehe.

Also, some banks help them evade taxes.

Dude, stop with the FUD. All tax avoidance is intentional, that is the definition of tax avoidance and there is nothing illegal about it. It is simply using the tax rules to your advantage, anyone can do it.

How do some banks help corporations evade taxes?  Your just spreading nonsense.

This is not fud. They not only help corporations or fellow bankers, some of them help drug cartels and other criminal organizations launder their money. You accuse me of fud? You open your eyes to the world you live in. The banks are not your friends.

Do you want proof? Stop using Facebook and begin using the web properly. All the information you need is available.

[Carlton Banks]

How do some banks help corporations evade taxes?

This is not fud. They not only help corporations or fellow bankers, some of them help drug cartels and other criminal organizations launder their money. You accuse me of fud? You open your eyes to the world you live in.

This is (another) part of the frustration I'm feeling on this issue

I cannot fathom why people would even consider continuing to feed the following wretched cycle:

• government tells lies to start resource wars
• government uses tax revenues to fund war
• regular people pay the taxes
• corporations and their most significant employees pay little to zero tax
• latest war ends, corporations "win" the contract to mine the minerals or reconstruct the chaos left behind

they're basically fucking everyone, exceptionally hard, and the age-old response was "well, there's nothing I can do about it"


Satoshi finally gave you the power to do something. Use it. How do you want to be remembered?

This isn't once in a blue moon. Or once in a lifetime. Nor once in a generation. Not even once in an era.

This is an opportunity for all time, never before has it been possible to change the balance of power on this planet so much. We shoulder a great deal of responsibility as to how events will proceed and whether things change for the better or the worse.

[bbc.reporter]

@Carlton Banks. Also, everyone should deactivate their Facebook accounts, not only because of the up and coming Libra scam. It is worse than television. It is brainwashing us in ways much easier and deeper than before and turns us into sheep.

[Vishnu.Reang]

@Carlton Banks. Also, everyone should deactivate their Facebook accounts, not only because of the up and coming Libra scam. It is worse than television. It is brainwashing us in ways much easier and deeper than before and turns us into sheep.

Facebook is having billions or users and they won't care if a few thousand accounts get deactivated. I would like to get some free Libra coins as promotional offer and I would later convert them to BTC or ETH. Let's treat Libra the same way as we treated Bitcoin Cash and Bitcoin SV. Just collect the freebies and exchange them for something more valuable. I don't have any BSV in my wallet right now. I have converted all of them to BTC long back. Would do the same to Libra as well.

[o_e_l_e_o]

I would like to get some free Libra coins as promotional offer and I would later convert them to BTC or ETH.

If that's even possible. Since Facebook will have complete control over Libra, I suspect you will only be able to sell them back to Facebook for fiat, and probably not for other crypto. And even if you could, you would have to give Facebook a bitcoin address which you own, which they will 100% use to track you as much as possible unless you really mix those coins.

I also dumped my BCH immediately for a nice BTC boost, but I'm not going anywhere near Libra (or Facebook for that matter).

[bbc.reporter]

@Carlton Banks. Also, everyone should deactivate their Facebook accounts, not only because of the up and coming Libra scam. It is worse than television. It is brainwashing us in ways much easier and deeper than before and turns us into sheep.

Facebook is having billions or users and they won't care if a few thousand accounts get deactivated. I would like to get some free Libra coins as promotional offer and I would later convert them to BTC or ETH. Let's treat Libra the same way as we treated Bitcoin Cash and Bitcoin SV. Just collect the freebies and exchange them for something more valuable. I don't have any BSV in my wallet right now. I have converted all of them to BTC long back. Would do the same to Libra as well.

Why are you caring about Facebook? Care about yourself and your own freedom. Also, you can take it furthest by supporting and using good anonymous coins. Let us make it harder for the IRS to make a criminal out of innocent people like us hehehe.

[bbc.reporter]

What gains? There are no gains until you sell any cryptocoin for fiat later. Does the American government tax people for paper gains from holding stocks.

The IRS says that trading a cryptocurrency for another cryptocurrency is a taxable event, even if the trade never touched fiat in any way. If you are using BTC to day trade an altcoin, or using a stable coin like USDT to day trade BTC, every single buy/sell/trade needs to be declared and have tax paid on it based on the market value in USD at the time of the trade.

If overall you lost money in a financial year from trading crypto, you can file those losses to offset taxes you will pay on other income.

I remembered this discussion when I was reading about Ethereum 2.0 and their plan on swapping ETH1 for their new ETH2 tokens. Does the taxable event also apply on Ethereum's swap?

[cr1776]

What gains? There are no gains until you sell any cryptocoin for fiat later. Does the American government tax people for paper gains from holding stocks.

The IRS says that trading a cryptocurrency for another cryptocurrency is a taxable event, even if the trade never touched fiat in any way. If you are using BTC to day trade an altcoin, or using a stable coin like USDT to day trade BTC, every single buy/sell/trade needs to be declared and have tax paid on it based on the market value in USD at the time of the trade.

If overall you lost money in a financial year from trading crypto, you can file those losses to offset taxes you will pay on other income.

I remembered this discussion when I was reading about Ethereum 2.0 and their plan on swapping ETH1 for their new ETH2 tokens. Does the taxable event also apply on Ethereum's swap?

Almost definitely yes given that both chains will continue and you can swap one for the other - assuming nothing has changed since I last read about it.  As stated above, even bartering is a taxable event.

The authoritarians (socialist, fascist, communist, any collectivists, etc) want the money and power and will do anything they can to realize it including making enough things illegal that everyone is guilty of something.  Then they can use selectively enforcement to get compliance from difficult people.  The US Constitution was written as a document of limited, enumerated powers. Since the late 1800s, the left's goal has been to turn it into a document of enumerated liberties in order to gain power and they have succeeded.

And as far as it being the IRS to blame as above, it isn't the IRS, it is the authoritarian collectivists who make the laws and then hire bureaucrats to enforce them. Blaming the IRS is misplaced, but useful to the authoritarians to have people blame them instead of the actual people who wrote and passed the laws-it allows them to keep getting elected in order to "fix" the problem with more laws and regulations. 

[figmentofmyass]

I remembered this discussion when I was reading about Ethereum 2.0 and their plan on swapping ETH1 for their new ETH2 tokens. Does the taxable event also apply on Ethereum's swap?

isn't it just a hard fork like ethereum's past ones? the recent IRS guidance (confusing as it was) tried to speak to that scenario:

A hard fork occurs when a cryptocurrency undergoes a protocol change resulting in a permanent diversion from the legacy distributed ledger.  This may result in the creation of a new cryptocurrency on a new distributed ledger in addition to the legacy cryptocurrency on the legacy distributed ledger.  If your cryptocurrency went through a hard fork, but you did not receive any new cryptocurrency, whether through an airdrop (a distribution of cryptocurrency to multiple taxpayers’ distributed ledger addresses) or some other kind of transfer, you don’t have taxable income.

If a hard fork is followed by an airdrop and you receive new cryptocurrency, you will have taxable income in the taxable year you receive that cryptocurrency.

my reading of that is that if the old network is abandoned, there is no taxable income. an example of this would be ethereum's first hard fork from "frontier" to "homestead". if multiple viable networks emerge (as happened with ETC or BCH) then there may be taxable income incurred on receipt, depending when/where you received the tokens.

[bbc.reporter]

@figmentofmyass. It is not a hard fork. It is a new blockchain where you need to make a one time swap migration from ETH1 to ETH2.

Is the swap as taxable event?

[figmentofmyass]

@figmentofmyass. It is not a hard fork. It is a new blockchain where you need to make a one time swap migration from ETH1 to ETH2.

Is the swap as taxable event?

ah, i wasn't aware of this. i thought it was just a straightforward fork of the blockchain.

from what i'm reading here, it doesn't seem like a taxable event. there will essentially be two interoperable blockchains with a 1:1 peg, sort of like a sidechain. there is no "airdrop" occurring. with a one-way bridge, you need to effectively burn your 1.0 coins to receive 2.0 coins. and with a two-way bridge, it's just like locking coins up in LN or sidechains.