[2019-07-26] The IRS is warning thousands of cryptocurrency holders to pay taxes

[Guardian.P]

What nonsense, if I buy a crypto from my salary, then I will pay tax again? This is a robbery! Tax on tax. When you buy the currency of another country in the exchanger do you also pay tax?

[Carlton Banks]

For me I think it's fair to have to pay taxes, after all, we're the ones who benefit, but I don't necessarily agree with the rates applied.
In fact, more taxes I pay more I'm happy because it means I earned more

Indeed, we are living in a land where the government maintain it.  So definitely we need to contribute in form of taxes.  Wether they (government officials)corrupt it or not, we are bound to it(taxation) and is our responsibility as a people of a nation.

you're barely paying taxes for your own benefit at all, you both clearly do not understand the system

• the majority of taxes in the modern age are used to pay OLD government debts, anything up to 100 years old!
• the money used to pay for your public services today is borrowed, using loans that aren't due for repayment for up to 100 years in the future
• private companies who "win" a contract for public services are usually government cronies, wasting money that's (again) borrowed from decades away as loans that they don't need to take responsibility for
• or a government department does essentially the same thing; borrows a load of money, and spends it on things that aren't needed for the project (in some countries they pocket huge amounts using accounting fraud)

think about it, this is money they borrowed from our kids & grandkids they're misusing, and so any taxes you pay now was borrowed from you already 20, 40, 50 or 100 years before when you were not even born



Bitcoin was created as a protest against this sort of system, but if you really want to pay your BTC back into that kind of system (systematized fraud/theft), then you'll get exactly what you deserve<sup>1


1</sup> crappy services, and 40-80% of your BTC converted to cocaine in politicians/contractors/government administrators noses

[1Referee]

you're barely paying taxes for your own benefit at all, you both clearly do not understand the system

Actually, they do as governments have done everything they could to get people to adopt that thinking.

The part that I find more interesting, is that the people who actually do understand the system's (flawed) working, are still enabling them to do the same because they're either too afraid to say no to certain forms of taxaction (likely out of fair of prison time or high fines), or they don't want to look like a "criminal tax evader" within their circle of friends and family.

My question to you pretty much is; taking the above in consideration, what forms of taxes do you pay and not pay?

[rodel caling]

What nonsense, if I buy a crypto from my salary, then I will pay tax again? This is a robbery! Tax on tax. When you buy the currency of another country in the exchanger do you also pay tax?

You had a point for that mate possible to pay taxes double or triple in very transactions made. But I am curious about it IRS implementation collecting taxes from the coinbase and bittrex users.
What happen to the crypto users not follow to the IRS command to pay taxes.

[Carlton Banks]

My question to you pretty much is; taking the above in consideration, what forms of taxes do you pay and not pay?

I simply avoid everything I can, and evade when it's smart to do so.

• find people growing food, and buy directly from them. there's a high chance it will be healthier, as they will have an actual conscience
• find independent businesses that sell other stuff for your home. try to get things from people outside your local gangster turf, it's harder for them to track the paper trail, so the people you buy from are more likely to use it as an opportunity to evade taxes themselves
• don't use the postal system for any of this, as the postal system is subsumed into your local gang's tax reporting

In most of these cases, it's not possible to stop people you trade with from paying some taxes, it's hard to be a business and avoid scrutiny of your finances. But the world's a big place, you can find businesses who trade outside of scrutinizers, if you just look for them

[chaoscoinz]

10k+ taxpayers are receiving warning letters from the IRS. there are 3 types of letters---one is just a "soft notice" that is information-only, not alleging any misreporting. the other two are a bit more threatening. this is how one user on reddit described them:

6174: Basically means they know you have crypto
6174-A: Basically means they think you broke the law and haven't paid your taxes, and may or may not start enforcement actions on you soon
6173: Means they are sure you broke the law, and are coming after you now.

here's the article from CNBC. an excerpt:

If you own bitcoin or other cryptocurrencies, you might want to check your mailbox.

The Internal Revenue Service is in the process of sending letters to U.S. citizens who own virtual currency and potentially failed to pay the necessary taxes and to those who improperly reported taxes on digital assets last year, the agency announced Friday.

“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties,” IRS Commissioner Chuck Rettig said in a news release. “The IRS is expanding our efforts involving virtual currency, including increased use of data analytics.”

The agency said it started sending out letters last week that by the end of August will reach 10,000 taxpayers. The list of names was obtained through “various ongoing IRS compliance efforts.” In some cases, the IRS said taxpayers could be subject to criminal prosecution.

Last year, popular trading platform Coinbase alerted 13,000 customers that it was complying with a court order to provide the IRS with information on accounts worth at least $20,000 from the years 2013 to 2015. The IRS did not say whether its mailing list was a result of the Coinbase disclosures.

and also an insightful article written by a tax attorney on the subject: Crypto Investors Don't Need To Panic About IRS Letter 6174-A, Here's Why

Do you know if this is a follow up to the coinbase subpoena that requested information regarding customers  who have transactions over $20,000 or more?

[o_e_l_e_o]

Do you know if this is a follow up to the coinbase subpoena that requested information regarding customers  who have transactions over $20,000 or more?

Yes. As far as I know, the IRS hasn't said where they are getting their info from, and I'd be surprised if they ever did since people would then know to avoid those methods. However, there have been loads of users on this forum and on reddit who have confirmed that Coinbase shared their details and they also received the tax letters.

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

[chaoscoinz]

Do you know if this is a follow up to the coinbase subpoena that requested information regarding customers  who have transactions over $20,000 or more?

Yes. As far as I know, the IRS hasn't said where they are getting their info from, and I'd be surprised if they ever did since people would then know to avoid those methods. However, there have been loads of users on this forum and on reddit who have confirmed that Coinbase shared their details and they also received the tax letters.

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

I knew this would happen eventually, due to regulatory bodies cracking down on crypto. It also explains why Huobi Global and Binance have taken the initiative to open American based exchanges, while blocking further access from new account signups for U.S citizens.

[malevolent]

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

That applies to foreign exchanges, too, if someone has any doubts. A lot of countries have treaties or similar agreements signed between them to share financial information for tax purposes, and a lot of people, except maybe those who live in the poorest 3rd world countries, may one day find out they have unpaid taxes to pay if they ever went through KYC.

[o_e_l_e_o]

A lot of countries have treaties or similar agreements signed between them to share financial information for tax purposes

Not just for tax purposes, but for general mass surveillance and spying on their citizens. The Five/Nine/Fourteen Eyes countries, for example, spy on their own and each other's citizens, and share all that information between themselves. And if you think the spying programs we know about are bad, just think about all the ones that the public has no idea exist.

Exchanges initially existed in an unregulated space providing a product (bitcoin) that government's hadn't heard of. Now every government knows about bitcoin and will regulate any company which tries to operate within its borders. It won't be long before every exchange will be handing over details of all their customers or face being shutdown. And when faced with a choice between profits or protecting customer privacy, I have zero doubt that every currently operating exchange will pick the route which maintains their own profits. Once those details are in the hands of one government, it won't be long before they are in the hands of the US and shared with all its allies.

Simple solution; don't do KYC, trade peer to peer.

[figmentofmyass]

10k+ taxpayers are receiving warning letters from the IRS. there are 3 types of letters---one is just a "soft notice" that is information-only, not alleging any misreporting. the other two are a bit more threatening. this is how one user on reddit described them:

6174: Basically means they know you have crypto
6174-A: Basically means they think you broke the law and haven't paid your taxes, and may or may not start enforcement actions on you soon
6173: Means they are sure you broke the law, and are coming after you now.

Do you know if this is a follow up to the coinbase subpoena that requested information regarding customers  who have transactions over $20,000 or more?

the consensus is that's the primary source of the IRS data used in this campaign. most people who reported receiving letters confirmed that.

at this point, there are other american exchanges that send the 1099-k though, like gemini. if the IRS received a 1099-k from gemini and you reported nothing, i'm confident you'd receive a letter too.

[1Referee]

My question to you pretty much is; taking the above in consideration, what forms of taxes do you pay and not pay?

I simply avoid everything I can, and evade when it's smart to do so.

• find people growing food, and buy directly from them. there's a high chance it will be healthier, as they will have an actual conscience
• find independent businesses that sell other stuff for your home. try to get things from people outside your local gangster turf, it's harder for them to track the paper trail, so the people you buy from are more likely to use it as an opportunity to evade taxes themselves
• don't use the postal system for any of this, as the postal system is subsumed into your local gang's tax reporting

In most of these cases, it's not possible to stop people you trade with from paying some taxes, it's hard to be a business and avoid scrutiny of your finances. But the world's a big place, you can find businesses who trade outside of scrutinizers, if you just look for them

That's next level. I definitely didn't see that coming, so thanks for the insight.

I thus far have mainly focused on whatever I hold outside the banking system in terms of wealth, which comes down to not declare any of my cold wallet Bitcoin holdings, and not declare what I have in physical Gold. It's so silly that I have to do this, but the other option is to hand these government criminials 1-1.5% annually, which I won't ever be doing.

It's one very arguable thing to tax profits, but to annually tax people's net worth that hasn't been touched in years is the most retarded thing ever. This blatant form of theft should never be rewarded.

[Vishnu.Reang]

What nonsense, if I buy a crypto from my salary, then I will pay tax again? This is a robbery! Tax on tax. When you buy the currency of another country in the exchanger do you also pay tax?

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

[coolcoinz]

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

That applies to foreign exchanges, too, if someone has any doubts. A lot of countries have treaties or similar agreements signed between them to share financial information for tax purposes, and a lot of people, except maybe those who live in the poorest 3rd world countries, may one day find out they have unpaid taxes to pay if they ever went through KYC.

Funny thing, but the exchanges where I actually went through KYC went bust and the data is most likely gone along with them. Some other exchanges that I bought my coins on also went bust and disappeared or got hacked, or whatever. If you got lucky like me, hodl and don't go through KYC ever again to limit your chances of those mobsters from the government destroying your life.

[Guardian.P]

What nonsense, if I buy a crypto from my salary, then I will pay tax again? This is a robbery! Tax on tax. When you buy the currency of another country in the exchanger do you also pay tax?

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

I work at work, earn money, pay taxes and have the right to buy anything you like for this money, do you think that I have to pay another tax for every purchase? there are so many taxes on one product, I bought a product on it, I already paid tax, the seller, + they take a tax on salaries, 3 taxes on one product, then I will sell this product to you and pay the tax again? will you still sell this product to someone and also pay tax, what service did the state provide you to buy this product, and do you still have to pay for the service? (let's say that the product is some kind of token)

[Guardian.P]

What nonsense, if I buy a crypto from my salary, then I will pay tax again? This is a robbery! Tax on tax. When you buy the currency of another country in the exchanger do you also pay tax?

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

I work at work, earn money, pay taxes and have the right to buy anything you like for this money, do you think that I have to pay another tax for every purchase? there are so many taxes on one product, I bought a product on it, I already paid tax, the seller, + they take a tax on salaries, 3 taxes on one product, then I will sell this product to you and pay the tax again? will you still sell this product to someone and also pay tax, what service did the state provide you to buy this product, and do you still have to pay for the service? (let's say that the product is some kind of token)

It's just ridiculous, let me sell you a product, and then you sell me the same product, let's do it 100 times, and for all operations we will pay 100 times tax each? Solving the problem, each product must be indexed on the blockchain network, that a tax has been paid for it! the only way to defeat the robbery by the state! One tax on one item always !!!

[malevolent]

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

Either there's VAT on the coins, it's included in the price, and the seller pays it he has a VAT-registered business (and later gets it back), or VAT doesn't apply/he's not selling as a business and there's no VAT. Capital gains tax or income tax might not apply, where I'm from I don't have to pay it if I hold onto coins for >6 months.

[Vishnu.Reang]

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

Either there's VAT on the coins, it's included in the price, and the seller pays it he has a VAT-registered business (and later gets it back), or VAT doesn't apply/he's not selling as a business and there's no VAT. Capital gains tax or income tax might not apply, where I'm from I don't have to pay it if I hold onto coins for >6 months.

Laws can vary from country to country. I am residing in India and here we need to pay capital gains tax on profits arising from the sale of any asset. The gains qualify as long term capital gains if held for more than three years (liable to a tax of 20% minus indexing) and in case it was being held for less than three years then it will be treated as short term capital gains (equivalent to regular income, subject to ordinary income tax with highest slab at 42%).

[Carlton Banks]

Laws can vary from country to country. I am residing in India and here we need to pay capital gains tax on profits arising from the sale of any asset. The gains qualify as long term capital gains if held for more than three years (liable to a tax of 20% minus indexing) and in case it was being held for less than three years then it will be treated as short term capital gains (equivalent to regular income, subject to ordinary income tax with highest slab at 42%).

Don't take this as tax advice or anything () but it's very difficult to prove exactly how long you've really been holding the money for. The blockchain is not an accurate record for length of possession, only for when transactions happened. Think about that

[bryant.coleman]

Laws can vary from country to country. I am residing in India and here we need to pay capital gains tax on profits arising from the sale of any asset. The gains qualify as long term capital gains if held for more than three years (liable to a tax of 20% minus indexing) and in case it was being held for less than three years then it will be treated as short term capital gains (equivalent to regular income, subject to ordinary income tax with highest slab at 42%).

Don't take this as tax advice or anything () but it's very difficult to prove exactly how long you've really been holding the money for. The blockchain is not an accurate record for length of possession, only for when transactions happened. Think about that

Well.. if you are claiming for long-term holding, then you need to show the proof of purchase from that time. Blockchain transaction won't be enough for this purpose, as it will be having zero information regarding the price of the coins and the identity of the buyer/seller. In the tax return, you may need to give details of the exchange log, and the bank transaction. Now things can get complicated if you claim that you purchased crypto for physical cash. In such cases, you won't be having any other proof with you (other than the Blockchain transaction).