Biden's IRS Plans Could Boost Crypto Adoption

[Silberman]

I see it from the other side, which is that the United States will appear more tax hawkish, which means that more restrictions will be imposed on the sale and purchase of cryptocurrencies, and thus more laws will be legislated to obtain more tax money.
The upside is that it will help the bitcoin price to grow as many companies will buy and not sell to avoid realizing capital gains.
The bad news is that many will avoid the alt currency market.

And how is that bad news? Except for a few selected altcoins the 99% of them are either scams or coins that are not worth the trouble to invest in them, the US is in trouble they already have the most complex tax system in the entire world and now they want to tighten how they apply their tax code in a moment in which many businesses are on the brink of bankruptcy, in fact what it is needed now are less taxes but obviously this is something that will never come to the mind of Biden and his advisors.

[Princejebs]

He approved 15$/hr as minimum wage but sometimes is good to think as a politician and not as an economics person. There is always a end where government always receive back this money they are injecting into the economic through taxation and when you do the maths, you will be surprised that the minimum wage was just a value but the purchasing power is still the same and here comes increasingly inflation we have always experienced years ago.

[Sithara007]

Overall, this is another component of the $6 trillion spending plan by Biden. Nowhere in the world, socialist policies have been implemented on this scale. In short, he will be taking $6 trillion from successful people and profitable corporations, and then distributing it to the unproductive population in the form of childcare benefits and other handouts. Being a non-American, I am happy about this. The American economy needs to be destroyed and China needs to emerge as the no.1 economic power. These stupid plans will just accelerate it. The suburban voters who dumped the GOP to vote for Biden/Kamala will be really excited right now. 

[so98nn]

Sure its great idea but some day you will have to use the fiat currency to fulfil your daily needs. We can not rely on the crypto currencies all the time. Yeah, I can do my business with it, get payments from the user in the form of crypto currency but until when?

It won't be possible to hide the loose end. I mean when I am running a business I need supply, raw materials, logistic movement etc. All of these I will have to manage in the form of crypto currency which does not seem to be possible.

If I am buying stuff in the fiat then I will have to show its sell or inventory health to the IRS audit's. They will catch me in blink of an eye when they see purchases are happening but sells are not getting paid in fiat but still my business is flourishing?

This could be the scenario for that matter.

[mu_enrico]

It's not recommended if you want to avoid tax with crypto, because if they catch you, the punishment will outweigh the benefit, or you will lose more money paying fines and stuff. But you can save in crypto and only cash out when the taxes are low (it's legal). You can move to red states as well.

Anyway, Biden's plan supposedly only affects the top 1% or big corporations, right? No chance they will risk fines/jail time by using crypto.

[iv4n]

I see it from the other side, which is that the United States will appear more tax hawkish, which means that more restrictions will be imposed on the sale and purchase of cryptocurrencies, and thus more laws will be legislated to obtain more tax money.
The upside is that it will help the bitcoin price to grow as many companies will buy and not sell to avoid realizing capital gains.
The bad news is that many will avoid the alt currency market.

And how is that bad news? Except for a few selected altcoins the 99% of them are either scams or coins that are not worth the trouble to invest in them, the US is in trouble they already have the most complex tax system in the entire world and now they want to tighten how they apply their tax code in a moment in which many businesses are on the brink of bankruptcy, in fact what it is needed now are less taxes but obviously this is something that will never come to the mind of Biden and his advisors.

And it's happening:

Biden’s capital gains tax plan to pull crypto down to earth from the moon?

Source: https://cointelegraph.com/news/biden-s-capital-gains-tax-plan-to-pull-crypto-down-to-earth-from-the-moon

Maybe a bit sensationalistic headline, but looks like Hugeblack expected something like this... government rarely gives, and when it does it's like here, with some secret agenda behind... give a little, take a lot!
Of course, this article is all about rumors! Nothing is confirmed yet, but somehow I am sure they will try to take their helicopter money back, somehow!

It's not recommended if you want to avoid tax with crypto, because if they catch you, the punishment will outweigh the benefit, or you will lose more money paying fines and stuff. But you can save in crypto and only cash out when the taxes are low (it's legal). You can move to red states as well.

Anyway, Biden's plan supposedly only affects the top 1% or big corporations, right? No chance they will risk fines/jail time by using crypto.

I agree! Those who wish to try to go against the government should be ready for possible consequences!

[Vatimins]

     At first, it seems to be a good idea since governments and banks do not chase that far into this industry since it is quite new to the world. But in reality, if they really wanted to, they can tract down every transaction you have. That us if you are someone big enough to waste such efforts for. So if you are, better think twice before creating such plans. Because although there are some altcoins out there with quite good enough amount of anonymity, nothing is fullproof. So be careful. Better abide by laws instead of always having to look behind your shoulders all the time.

[kryptqnick]

President Biden is seeking $80 billion in extra funding to bolster IRS and tax enforcement.  There is an estimated one trillion dollars in uncollected taxes, and the program will more than pay for itself, boosting tax receipts by more than $700 billion over ten years.  To be clear, this is not a tax increase, but the enforcement of tax laws that are already on the books and which tax payers regularly skirt.

BUT, the interesting part is this:  Under the plan, banks and other payment providers would be required to tell the IRS how much money came into and out of individuals' and businesses' bank accounts each year.  This new information would be useful to the IRS in determining who to audit when a business or individual has far more bank activity than their tax return and tax bill would suggest.  (Source: https://www.wsj.com/articles/biden-to-seek-80-billion-to-bolster-irs-tax-enforcement-11619539465)

Now, if you're a lowlife individual or business who is currently illegally underreporting your tax obligation, the new proposed bank reporting requirement is a threat to your illegal lifestyle.  Sure seems like an incentive to start transacting in crypto, doesn't it?

It could be theoretically, but I think it's just a tiny loophole that will be fixed soon. After all, cryptos are regulated and taxed in the US, right? So people do have to report them and pay some percentage to the state for capital gains if I'm not mistaken. Perhaps the thing with cryptos is already enforced well enough, so that's why Biden's focusing on fiat. Or maybe he's focusing on the most prospective part financially, and since way more people in the US use fiat than cryptos, it makes more sense to make sure they're reposting their fiat income properly before moving to crypto users.

[Hydrogen]

I would expect Joe Biden to follow the precedent set by democrats in california and new york. The complete opposite of boosting crypto adoption.

Right wing states like florida and texas are most likely to implement friendly policies and laws towards crypto.

These trends hold true globally as well. Left wing states like china tend to be horribly repressive and hostile towards emerging technologies like crypto(which they have difficulty directly regulating and controlling). While more right wing states like iceland and the philippines offer more attractive conditions for crypto adoption. Recognizing the value and job market benefits associated with embracing new innovations.

[Gyfts]

Don't worry, Biden's already addressed the whole transition to crypto by increasing the capital gains taxes on high earners. So if you're a small business, not too much to worry about because you'd never transition to crypto anyways, but larger businesses get to pay more in taxes, and there is no safe haven in crypto unless you want to tax evade, which is an all around stupid idea. There is no winning here. Sucks for business owners in the US.

[jaysabi]

BUT, the interesting part is this:  Under the plan, banks and other payment providers would be required to tell the IRS how much money came into and out of individuals' and businesses' bank accounts each year.  This new information would be useful to the IRS in determining who to audit when a business or individual has far more bank activity than their tax return and tax bill would suggest.  (Source: https://www.wsj.com/articles/biden-to-seek-80-billion-to-bolster-irs-tax-enforcement-11619539465)

Hmm, but does this not collide with bank secrecy law though? They are going to peep with bank accounts of entities in order to gain information. But yeah, perhaps there is a difference between personal and business accounts, and in order to survive this plan of Biden's, you need to get an insanely good accountant to cover up your tracks. You can also try and deal with cryptocurrencies if you want, and the privacy it offers is way better than banks at this point.

With this, businesses would be incentivized to use cryptocurrencies to save thousands on their businesses rather than give it to the government.

Nah, there's no law that protects your banking privacy from the government. The bank secrecy act is actually about establishing requirements on banks to know who they're dealing with and abiding by KYC in order to fight money laundering. The US even forced Swiss banks to start reporting on Americans who had accounts there by threatening to cut them off from the US financial system, so this would be very much in line with what the government already does.

[teosanru]

President Biden is seeking $80 billion in extra funding to bolster IRS and tax enforcement.  There is an estimated one trillion dollars in uncollected taxes, and the program will more than pay for itself, boosting tax receipts by more than $700 billion over ten years.  To be clear, this is not a tax increase, but the enforcement of tax laws that are already on the books and which tax payers regularly skirt.

BUT, the interesting part is this:  Under the plan, banks and other payment providers would be required to tell the IRS how much money came into and out of individuals' and businesses' bank accounts each year.  This new information would be useful to the IRS in determining who to audit when a business or individual has far more bank activity than their tax return and tax bill would suggest.  (Source: https://www.wsj.com/articles/biden-to-seek-80-billion-to-bolster-irs-tax-enforcement-11619539465)

Now, if you're a lowlife individual or business who is currently illegally underreporting your tax obligation, the new proposed bank reporting requirement is a threat to your illegal lifestyle.  Sure seems like an incentive to start transacting in crypto, doesn't it?

Ah really? Do you think it would be difficult to dig down crypto transactions for them from your KYC wallets? I don't think this is a lot of incentive. Also, Biden IRS also plans to Impose a huge Capital Gains Tax on the sale of Capital Assets and again and again they have clarified that Cryptocurrencies are considered as Capital Assets which means these too will attract a huge 40% tax which is Insane. Also, the term selling cryptocurrencies is Insane. If you send someone crypto for a transaction it can be termed as a sale of crypto as there are no laws governing it?

BUT, the interesting part is this:  Under the plan, banks and other payment providers would be required to tell the IRS how much money came into and out of individuals' and businesses' bank accounts each year.  This new information would be useful to the IRS in determining who to audit when a business or individual has far more bank activity than their tax return and tax bill would suggest.  (Source: https://www.wsj.com/articles/biden-to-seek-80-billion-to-bolster-irs-tax-enforcement-11619539465)

Hmm, but does this not collide with bank secrecy law though? They are going to peep with bank accounts of entities in order to gain information. But yeah, perhaps there is a difference between personal and business accounts, and in order to survive this plan of Biden's, you need to get an insanely good accountant to cover up your tracks. You can also try and deal with cryptocurrencies if you want, and the privacy it offers is way better than banks at this point.

With this, businesses would be incentivized to use cryptocurrencies to save thousands on their businesses rather than give it to the government.

Nah, there's no law that protects your banking privacy from the government. The bank secrecy act is actually about establishing requirements on banks to know who they're dealing with and abiding by KYC in order to fight money laundering. The US even forced Swiss banks to start reporting on Americans who had accounts there by threatening to cut them off from the US financial system, so this would be very much in line with what the government already does.

Banking Privacy is a myth. It is enforceable more prominently to the articles/ things that you store in Bank Lockers, it can in no way protect you from providing information to any government. Infact Banks are the most important and Accurate source of information for most of the agencies due to the huge Transaction logs that they maintain. Banking anonymously is a myth even in Swiss Accounts.

[Sithara007]

Ah really? Do you think it would be difficult to dig down crypto transactions for them from your KYC wallets? I don't think this is a lot of incentive. Also, Biden IRS also plans to Impose a huge Capital Gains Tax on the sale of Capital Assets and again and again they have clarified that Cryptocurrencies are considered as Capital Assets which means these too will attract a huge 40% tax which is Insane. Also, the term selling cryptocurrencies is Insane. If you send someone crypto for a transaction it can be termed as a sale of crypto as there are no laws governing it?

Actually it is not 40%, but more than that in many of the states. You need to include the state taxes as well. If the state taxes are also included, then the long term capital gains tax can be as high as 56.7% in California and 54.3% in Minnesota. These will be applicable to cryptocurrency transactions as well. And each and every cryptocurrency transaction made by a US citizen needs to be mentioned in the income tax return, irrespective of the amount.

[teosanru]

Ah really? Do you think it would be difficult to dig down crypto transactions for them from your KYC wallets? I don't think this is a lot of incentive. Also, Biden IRS also plans to Impose a huge Capital Gains Tax on the sale of Capital Assets and again and again they have clarified that Cryptocurrencies are considered as Capital Assets which means these too will attract a huge 40% tax which is Insane. Also, the term selling cryptocurrencies is Insane. If you send someone crypto for a transaction it can be termed as a sale of crypto as there are no laws governing it?

Actually it is not 40%, but more than that in many of the states. You need to include the state taxes as well. If the state taxes are also included, then the long term capital gains tax can be as high as 56.7% in California and 54.3% in Minnesota. These will be applicable to cryptocurrency transactions as well. And each and every cryptocurrency transaction made by a US citizen needs to be mentioned in the income tax return, irrespective of the amount.

Ohh that's Interesting, I didn't know taxes can go this High in the US. More than 50% is like crazy. In my country Long term Capital gains are taxed at a flat rate of 20% and no state Tax is there. I think this is why US is not so concerned with the use of Cryptocurrencies because they know that ultimately it will add huge numbers to their Federal Reserves because they are going to consider every transaction made in crypto as a purchase or sale of cryptocurrencies. So I have a query here? If I buy something from you for example any art or collectible and pay you in Bitcoin, will it still be considered as selling my bitcoins? Because it's not treated as a currency this is a scenario where I am giving you my property and receiving your property in return.

[Silberman]

I would expect Joe Biden to follow the precedent set by democrats in california and new york. The complete opposite of boosting crypto adoption.

Right wing states like florida and texas are most likely to implement friendly policies and laws towards crypto.

These trends hold true globally as well. Left wing states like china tend to be horribly repressive and hostile towards emerging technologies like crypto(which they have difficulty directly regulating and controlling). While more right wing states like iceland and the philippines offer more attractive conditions for crypto adoption. Recognizing the value and job market benefits associated with embracing new innovations.

It is incredible that they are so shortsighted especially when it comes to California, after all Silicon Valley was the center of the world when it came to innovation and now they are against innovation, it seems they are being left behind especially since the taxes there are so high and it seems they are no longer friendly to new technologies, and whenever that happens you know that place is in a path of decadence as the only way forward is to embrace innovation and new technologies.

[jaysabi]

And who exactly will give him this $80 billion then all the people who already pay taxes all the time, it's not coming from his own pockets, and his ''plan'' is to hire more people to work for government and IRS...

The government defines the taxes and people pay them. People cheating the current tax laws costs the US government hundreds of billions of dollars a year. The IRS audits people to find the cheats and forces them to pay up. The IRS is understaffed (intentionally because of republican deliberate attempts to undermine the system).  So spending $80 billion dollars on more IRS staff will create $800 billion over the next 10 years in people paying the taxes they currently owe but cheat the government out of.  To answer your question, the money initially comes from congress, it ultimately is paid back 10x by people paying taxes they owe.

Now, if you're a lowlife individual or business who is currently illegally underreporting your tax obligation, the new proposed bank reporting requirement is a threat to your illegal lifestyle.  Sure seems like an incentive to start transacting in crypto, doesn't it?

Your topic is misleading and I don't understand how moving illegal transaction to Bitcoin public blockchain ledger would make any sense with crypto adoption...
except maybe making work easier for federal agents to catch you and track everything you did online, because they need to cash out at some point with this transactions.
Biden can't do anything good for Bitcoin from his basement with his new regulations, and honestly I think he is just reading the script and doing what someone else told him to do.

Topic isn't misleading, you just don't understand what's going on. If banks are required to report transaction totals to the government (which they don't have to do currently), it increases the audit risk for anyone dodging taxes. This incentivizes anyone dodging taxes to reduce banking transactions in order to continue evading taxes, which means either cash or crypto. Since cash isn't particularly useful in an e-commerce economy, crypto becomes attractive for those trying to dodge paying taxes.

[goldade]

President Biden is seeking $80 billion in extra funding to bolster IRS and tax enforcement.  There is an estimated one trillion dollars in uncollected taxes, and the program will more than pay for itself, boosting tax receipts by more than $700 billion over ten years.  To be clear, this is not a tax increase, but the enforcement of tax laws that are already on the books and which tax payers regularly skirt.

BUT, the interesting part is this:  Under the plan, banks and other payment providers would be required to tell the IRS how much money came into and out of individuals' and businesses' bank accounts each year.  This new information would be useful to the IRS in determining who to audit when a business or individual has far more bank activity than their tax return and tax bill would suggest.  (Source: https://www.wsj.com/articles/biden-to-seek-80-billion-to-bolster-irs-tax-enforcement-11619539465)

Now, if you're a lowlife individual or business who is currently illegally underreporting your tax obligation, the new proposed bank reporting requirement is a threat to your illegal lifestyle.  Sure seems like an incentive to start transacting in crypto, doesn't it?

I do believe that as much as this is a measure to make sure that citizens do not evade tax,  it'll help promote the adoption of bitcoin in the United States. Truth be told, it is tactical move to curb the evasion of tax by citizens but since this will require banks to send statement of accounts to the IRS, it will cause many to use bitcoin and other cryptocurrencies.
One of the many advantages of bitcoin is anonymity which means you don't need your details to make transactions. You can send coins to any country at anytime without knowing the name of the recipient. All you need is a wallet address which is enough.

[jaysabi]

President Biden is seeking $80 billion in extra funding to bolster IRS and tax enforcement.  There is an estimated one trillion dollars in uncollected taxes, and the program will more than pay for itself, boosting tax receipts by more than $700 billion over ten years.  To be clear, this is not a tax increase, but the enforcement of tax laws that are already on the books and which tax payers regularly skirt.

BUT, the interesting part is this:  Under the plan, banks and other payment providers would be required to tell the IRS how much money came into and out of individuals' and businesses' bank accounts each year.  This new information would be useful to the IRS in determining who to audit when a business or individual has far more bank activity than their tax return and tax bill would suggest.  (Source: https://www.wsj.com/articles/biden-to-seek-80-billion-to-bolster-irs-tax-enforcement-11619539465)

Now, if you're a lowlife individual or business who is currently illegally underreporting your tax obligation, the new proposed bank reporting requirement is a threat to your illegal lifestyle.  Sure seems like an incentive to start transacting in crypto, doesn't it?

I do believe that as much as this is a measure to make sure that citizens do not evade tax,  it'll help promote the adoption of bitcoin in the United States. Truth be told, it is tactical move to curb the evasion of tax by citizens but since this will require banks to send statement of accounts to the IRS, it will cause many to use bitcoin and other cryptocurrencies.
One of the many advantages of bitcoin is anonymity which means you don't need your details to make transactions. You can send coins to any country at anytime without knowing the name of the recipient. All you need is a wallet address which is enough.

I think the points in and out of bitcoin are very few where you can get convert bitcoin anonymously, and once you're identified you can be tracked because all transactions are public. There are probably ways around it, and there are other coins that may be more privacy focused and make it harder to track and identify individuals, so enforcement will need to find a way close those loopholes if they ever become a large tax avoidance mechanism.

[kpierce77]

Don't worry, Biden's already addressed the whole transition to crypto by increasing the capital gains taxes on high earners. So if you're a small business, not too much to worry about because you'd never transition to crypto anyways, but larger businesses get to pay more in taxes, and there is no safe haven in crypto unless you want to tax evade, which is an all around stupid idea. There is no winning here. Sucks for business owners in the US.

Yes, I believe that no safe haven in crypto is real, I just wonder if their government is ready for a decentralized system. as we know that the government likes centralized systems with easier control and implementation. but let's see what they will do, because the value the OP mentioned is quite huge, if it can't be handled properly it could be the best jokes in history

[Sithara007]

Yes, I believe that no safe haven in crypto is real, I just wonder if their government is ready for a decentralized system. as we know that the government likes centralized systems with easier control and implementation. but let's see what they will do, because the value the OP mentioned is quite huge, if it can't be handled properly it could be the best jokes in history

It will just lead to more and more harassment for the tax payer. IRS is properly funded and doesn't need anymore funds. Those who are paying their taxes will continue to do so and those who are evading their taxes will do that. Just because $80 billion is given to the IRS, there is no guarantee that suddenly the tax collection is going to increase. Democrats got their power after 4 long years and they seems to be in a hurry to print banknotes. Biden has stated that his "American Families Plan" will cost the treasury some $6 trillion. I am not sure whether the American economy will be able to survive such a massive increase to the federal debt. At this point I have only one advice to the cryptocurrency holders - keep your BTC safe and secure. You will need them soon.