10,000 American Cryptocurrency Owners Will Receive Warning Letters From the IRS

[Thirdspace]

If the IRS is asking cryptocurrency holders to pay taxes in holdings, then it should be willing to accept it as a legal means of exchange or as an asset. I still think its a step towards accepting cryptocurrency for whay it is-MONEY.

they treat bitcoin as convertible virtual currency, not real currency or legal tender
they do not acknowledge bitcoin as real money because it's not legal tender in any country
so US citizens will pay a bitcoin tax based on the tax that applies to property transactions
for details you can read Notice 2014-21 https://www.irs.gov/pub/irs-drop/n-14-21.pdf

[Gibreil]

Taxing bitcoin sound perfectly legit to me, but taxing shitcoin? I think they got a lot of paperwork to do, will IRS accept crypto to be part of the tax payment? We can tossing thousands of shitcoin to them with just a click of button.

Wow! But I wish that the tax they will collect can be paid also by shitcoins that we are holding on. It is not good to have a tax in cryptocurrency because not all of the cryptos we hold are valuable enough to be paid in IRS. Though I am not an American citizen, I am also holding shitcoins. If ever the tax collection in crypto might happen, I will quit in this industry.

[rodel caling]

Taxing bitcoin sound perfectly legit to me, but taxing shitcoin? I think they got a lot of paperwork to do, will IRS accept crypto to be part of the tax payment? We can tossing thousands of shitcoin to them with just a click of button.

Your correct IRS collecting taxes from the bitcoin or crypto users is a sign to the US government bitcoin is possible to become legit. And to all the holder's and bitcoin users need to follow the law of the state to avoid troubles filling agaist them a criminal case. To be clarified shitcoinis include in the crypto currency so thats why IRS need to put an taxes all crypto related coins.

[DaveF]

Has anyone gotten a letter? Or someone you know? I'm not talking friend of a friend, or I know someone who has. I'm talking actually holding the letter in your hand?
Because I am thinking that if you were not one of the 13k people who got notified by coinbase back in 2018 [ https://cointelegraph.com/news/how-not-to-panic-if-coinbase-is-turning-over-your-info-to-the-irs-expert-take ] that they gave the IRS your information you are probably safe.

-Dave

[Rinso]

right now they want bitcoin investor pay the taxes. next time are they really really banned it ? (let's hope it's not). if the US goverment hate bitcoin i think the taxes will very expensive and that is some of the way to tell US investor that they serious about they dont like bitcoin

[Muzika]

I am doubtful about only 10,000 American  are using cryptocurrency, I guess they acquire the information thru their local service provider of cash out options but I am pretty much sure that it is not only 10k users. Well, there is no issue about how many of them are users of crypto but they should come up with the laws and proper taxation.

[bryant.coleman]

I have seen this news circulated in at least three of the sub-forums here and the aim seems to be to create FUD and panic among the investors. I had clarified the details earlier, but no one seems to be listening. At least the OP in this case refrained from twisting the facts and stated it clearly that only around 10,000 are going to receive the notices. However, in the press section someone had claimed that every single Bitcoin holder residing in the United States is going to get an IRS notice.

There are around 20 to 30 million Bitcoin users in the United States. Out of this, many millions have accounts with crypto-exchanges. Out of this number, some 10,000 are suspected to have evaded taxes exceeding a certain threshold. The notices were sent to these people. Now don't create panic here claiming that everyone holding BTC will receive a notice.

[fiulpro]

But these are the warning letters regarding their savings , their investments in bitcoins.
It is something that is good to do since most people used to get away from taxes by investing in bitcoins therefore the government is just making sure that it is not misused in any way , I do think this is actually right to do.
Other people holding bitcoins and the ones giving taxes on time don't have to think about it.
Also it is not warning letters , it's more like asking them to follow the law and order.

[pisquare]

Although the taxation seems to effect negatively on the price of BTC and other cryptos, taxation is a big step to legalization of crypto currencies and avoid risks of subponea which was a risk to face.I will not make any arguement if it is ethical to take taxes on cryptos or not.With the news of taxation on USA also cancelled out the interest cut of FED.In my opinion 3rd and 4th Q of 2019 are lost but I am very hopefull about 2020.

[DaveF]

But these are the warning letters regarding their savings , their investments in bitcoins.
It is something that is good to do since most people used to get away from taxes by investing in bitcoins therefore the government is just making sure that it is not misused in any way , I do think this is actually right to do.
Other people holding bitcoins and the ones giving taxes on time don't have to think about it.
Also it is not warning letters , it's more like asking them to follow the law and order.

No, has nothing to do with their savings. It has to do with profits from buying and selling.
As of now, I have asked the same question in many of the threads that have been created about this and nobody can answer this 1 simple question:

Back in 2018 when Coinbase supplied the IRS with 13k or so users who had trades that were at or above certain thresholds.
They let all those people know that they gave their info to the IRS.

Has ANYONE who has received one of IRS letters NOT BEEN part of the group who got the notification from Coinbase.

If you have THAT is important information. Other than that it's just noise / FUD

-Dave

[squatter]

Has ANYONE who has received one of IRS letters NOT BEEN part of the group who got the notification from Coinbase.

So far, I haven't seen a single case where someone received an IRS letter and wasn't part of the Coinbase summons. I'd take this report with a grain of salt, but it seems to confirm what we already suspect:

However, anecdotal evidence on social media suggests that the 10,000+ affected are the Coinbase users whose details were shared with the IRS after an IRS summons forced the exchange to hand over names, birth dates, taxpayer IDs, addresses, and transactions histories of approximately 13,000 customers in February 2018.

A bitcoin investor who received a letter shared their experience talking to an IRS agent about the notices and was able to provide further insight into who the notices were sent to.

Under the username “zipzapbloop”, the Coinbase user stated on Reddit: “I just got off the phone with a very kind IRS agent who explained much of what we've already gathered. If you got 6174 or 6174-A, then unless you have good reason to believe you didn't comply, then treat the letters as essentially informational. She stated that their resources are very limited and even said that the letters were sent to some 13,000 who had Coinbase accounts. Yes, she actually said "Coinbase accounts."

[jake zyrus]

If they're going to ask those 10,000 Americans to pay for the tax, I think it's a one step forward for legalising cryptocurrency. Is it right or not? Because they're trying to regulate bitcoin by paying taxes.

But I'm curious on what's inside those letters. And why only 10,000. I bet more than that are using crypto.

[DaveF]

If they're going to ask those 10,000 Americans to pay for the tax, I think it's a one step forward for legalising cryptocurrency. Is it right or not? Because they're trying to regulate bitcoin by paying taxes.

But I'm curious on what's inside those letters. And why only 10,000. I bet more than that are using crypto.

Did you read what happened?
It looks like it's only 10K because Coinbase only gave them about 13k names. And that was kicking and screaming, with coinbases lawyers fighting it every step of the way.
So out of 13k people some probably paid all the taxes and some were below some threshold for some reason.

The rest got letters.

-Dave

[bryant.coleman]

If they're going to ask those 10,000 Americans to pay for the tax, I think it's a one step forward for legalising cryptocurrency. Is it right or not? Because they're trying to regulate bitcoin by paying taxes.

But I'm curious on what's inside those letters. And why only 10,000. I bet more than that are using crypto.

I think that they are after the low hanging fruit (those users who have undergone the KYC process with the exchanges and yet refuse to pay the taxes despite accruing god returns from the trade of cryptocurrency). In total, the number of cryptocurrency users in the United States may number in tens of millions. But the "big players" (i.e those who have a turnover of more than a million USD) may number just a few thousands. I guess the IRS is after these guys, and for now they are ignoring the small fish.

It can also be interpreted as a scare tactic to intimidate the cryptocurrency users. Send notices to a few thousands and create panic and FUD in the market. That will compel most of the remaining users to pay their taxes honestly. For the IRS, going after the millions of users is not practical, as they need a lot of resources to trace all these quasi-anonymous transactions.

[nicecrypto]

So how did they get hold of this data and know the number of people holding btc! yeah i get it, exchange snitches with their kyc plague have manage to centralized a supposedly decentralized space  i thought crypto was supposed to make you anonymous i guess that's no longer the case, thanks to binance and -co,  seeing this makes me appreciate a bit my country who really do not for now care about imposing such laws on citizens.

[RealMalatesta]

This is one of the reason why many people has been against these KYC requirement because this is the only means by which the government can really get that figure out, because if you look at companies from American into cryptocurrency known, they are just few of them that we know of, which means that we have other countries that claim they are decentralized but submitting our information to the government in an underground manner

If not, how would the government know that 10,000 crypto owners needs to pay tax which is one of the area that bitcoin has come to cover and stop the government from unnecessarily exploiting people, but as these exchanges are probably giving out our information to them, it is obvious that there is still lost to do in terms of decentralization.

[RonF]

Pay your taxes - millions of people depend on you

[tarrypig2199]

Just curious, anyone who does NOT have Coinbase/Gdax/Gemini account received the letter?

[meanwords]

If they're going to ask those 10,000 Americans to pay for the tax, I think it's a one step forward for legalising cryptocurrency. Is it right or not? Because they're trying to regulate bitcoin by paying taxes.

But I'm curious on what's inside those letters. And why only 10,000. I bet more than that are using crypto.

Did you read what happened?
It looks like it's only 10K because Coinbase only gave them about 13k names. And that was kicking and screaming, with coinbases lawyers fighting it every step of the way.
So out of 13k people some probably paid all the taxes and some were below some threshold for some reason.

The rest got letters.

-Dave

So the reason why those Americans are getting notified is because of tax evasion. I get why Bitcoin is getting taxed though. It's because Bitcoin is not treated as a currency in america as it is not issued by their bank so therefore it is treated as an asset as it holds value to the user.

It's their own fault for using a centralized exchange and not paying the tax issued. But to be honest, It's easy to get out of there. Pay the taxes and move all of you asset to a decentralized exchange. That way you'll be able to say that you are out of business and IRS won't be able to monitor you.

[Herbert2020]

It's their own fault for using a centralized exchange and not paying the tax issued. But to be honest, It's easy to get out of there. Pay the taxes and move all of you asset to a decentralized exchange. That way you'll be able to say that you are out of business and IRS won't be able to monitor you.

when you are trading you have to pay taxes. it is not about bitcoin, but trading in general when there is profit involved. and even if you are doing it off the exchanges you still have to pay taxes according to the law. if you are not fine with it then you have to change the law instead of evading it, that would mean doing something illegal and tax evasion can have dire consequences,