Biden administration unveils (proposes) new crypto tax reporting rules

[larry_vw_1955]

https://finance.yahoo.com/news/1-biden-administration-unveils-crypto-151112853.html

Cryptocurrency brokers, including exchanges and payment processors, would have to report new information on users' sales and exchanges of digital assets to the Internal Revenue Service (IRS) under a proposed U.S. Treasury Department rule published on Friday.

The rule is part of a broader push by Congress and regulatory authorities to crack down on crypto users who may be failing to pay their taxes.


in other words, even if you just did a small transaction they want to know so they can do surveillance and maybe audit you. being audited is probably no fun since you're kind of guilty until proven innocent they might even send you a bill in the mail and the only way to get out of it is to go through a huge beauracracy and hope someone helps.

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[pakhitheboss]

That is a proposal for the moment but it might become a reality. If that happens then DEX and Web3 wallets providers would ask their customers to pass KYC. No more anoymity  and zero privacy in the making. The worst would be that every country would follow the US if this proposal becomes a law.

[larry_vw_1955]

That is a proposal for the moment but it might become a reality. If that happens then DEX and Web3 wallets providers would ask their customers to pass KYC. No more anoymity  and zero privacy in the making. The worst would be that every country would follow the US if this proposal becomes a law.

maybe the government should just require bitcoin miners in that country to shave off a certain percent of all mined bitcoin transactions and send it to them. that way people wouldn't have to worry about all this hassle of owing crypto taxes. kind of like how merchants collect sales tax from the customer and forward it on to the IRS.

[OgNasty]

I think most people are probably properly reporting their crypto sales at this point. It’s pretty easy to do with exchanges being linked to most tax software. I don’t think this is a bad thing. Small purchases will be a pain in the ass but I don’t think this will be widely enforced immediately. They’re just laying the groundwork so they can arrest offenders when the time comes.

[Despairo]

IIRC there was a discussion about this where the government ask for complete trading history, this kind rule is like a joke because the government thought if every user are hold and use cryptos in centralized exchanges. If we're using non custodial wallet, this will be really hard to report if we use it for many thing e.g. lending, gambling, donation, pay subscription etc.

I don't think many people still remember with every transactions they made before.

[Latviand]

That is a proposal for the moment but it might become a reality. If that happens then DEX and Web3 wallets providers would ask their customers to pass KYC. No more anoymity  and zero privacy in the making. The worst would be that every country would follow the US if this proposal becomes a law.

Well, I guess it's high time that everyone should invest in VPN or Monero or anything to dodge IRS because what I see there is not just an invasion of privacy but also the restriction of sovereignty that crypto offers. I don't know about other countries following suit to this BS but one thing is for sure, this will be problematic for everyone in the crypto space not just those in the US. Or if worse things come, going abroad is still an option for those in the US.

I think most people are probably properly reporting their crypto sales at this point. It’s pretty easy to do with exchanges being linked to most tax software. I don’t think this is a bad thing. Small purchases will be a pain in the ass but I don’t think this will be widely enforced immediately. They’re just laying the groundwork so they can arrest offenders when the time comes.

It's not a bad thing if you don't mind not losing your data to the government, I guess it's not especially if you have a Driver's license and have been employed. But wouldn't this defeat the point of having a crypto in the first place? That the government doesn't have any hands on the table to mess with your finances?

[fruktik]

Well, I guess it's high time that everyone should invest in VPN or Monero or anything to dodge IRS because what I see there is not just an invasion of privacy but also the restriction of sovereignty that crypto offers. I don't know about other countries following suit to this BS but one thing is for sure, this will be problematic for everyone in the crypto space not just those in the US. Or if worse things come, going abroad is still an option for those in the US.

Russia introduced a mandatory tax on crypto a few years ago. What of it? Nothing succeeded. Most of those who have crypto or use it on a permanent basis are still in the "gray zone" without any obligations to the state in the form of tax deductions.
Until now, there are no tools that would allow to establish the beneficiaries of transactions. Therefore, let all these laws go to one place and very far away.
Yes, there is some rationality about investing in VPN. I am convinced that the dawn of this direction will soon begin again, as managers increasingly penetrate into the private lives of people, which is unacceptable.

[Husires]

You are talking about USA cryptocurrency exchanges, which we find that their number is decreasing with the passage of time, as many of these exchanges are moving towards other countries or prohibiting and restricting access to their services for citizens from the United States. Most citizens comply with the Internal Revenue Service (IRS), and I think that makes them more cautious in opening new deals (trading), which may positively affect the price of Bitcoin, as they will turn to HODLING.

[zasad@]

That is a proposal for the moment but it might become a reality. If that happens then DEX and Web3 wallets providers would ask their customers to pass KYC. No more anoymity  and zero privacy in the making. The worst would be that every country would follow the US if this proposal becomes a law.

According to the FATF rules, the KYC procedure must be completed for the sender and recipient of cryptocurrencies in the amount of more than $1,000. And until the recipient is unknown, the exchange should not allow such a transaction. We only need to prepare for the worst, because soon such restrictions will apply first to all large exchanges and then to medium and small ones. Nobody wants criminal charges.

[larry_vw_1955]

Well, I guess it's high time that everyone should invest in VPN or Monero or anything to dodge IRS because what I see there is not just an invasion of privacy but also the restriction of sovereignty that crypto offers. I don't know about other countries following suit to this BS but one thing is for sure, this will be problematic for everyone in the crypto space not just those in the US. Or if worse things come, going abroad is still an option for those in the US.

not even Monero can dodge the IRS if they start suspecting someone of not paying taxes on their crypto. what the IRS does is comes up with a "number" and says to pay it. if you disagree you have to appeal but you might not win your appeal so you're basically guilty until proven innocent. i hope that doesn't happen to people but i think probably it does sometimes not just with crypto but with other things too. leaving the USA doesn't do anything. as long as you are still an american citizen you're still subject to the IRS. the only way to get out of that is to relinquish american citizenship which i'm not sure how easy that is but you have to have money to do it. because why would another country want you if you are dead broke?

You are talking about USA cryptocurrency exchanges, which we find that their number is decreasing with the passage of time, as many of these exchanges are moving towards other countries or prohibiting and restricting access to their services for citizens from the United States. Most citizens comply with the Internal Revenue Service (IRS), and I think that makes them more cautious in opening new deals (trading), which may positively affect the price of Bitcoin, as they will turn to HODLING.

just like with internet sports gambling and online poker, no one wants to be doing business with american citizens. many sportsbooks and online poker sites stopped accepting americans. same with crypto.

According to the FATF rules, the KYC procedure must be completed for the sender and recipient of cryptocurrencies in the amount of more than $1,000. And until the recipient is unknown, the exchange should not allow such a transaction. We only need to prepare for the worst, because soon such restrictions will apply first to all large exchanges and then to medium and small ones. Nobody wants criminal charges.

no one wants the scrutiny of the IRS on them. because an audit won't just stop with investigating how much coffee they bought at starbucks using their bitcoin debit card. it's going to go into every thing on their entire tax return and income and everything so they can try and get as much out of that taxpayer as possible. just answering "YES" on the tax return about if you used crypto in the past year well you might as well be answering the question "Would you like for us to make an extra consideration to audit you?"

[Poker Player]

The first thing I have thought about is what quantities we are talking about when reporting. According to the news:

It also extended reporting requirements for certain cash transactions of more than $10,000 to digital assets.

That is, from that limit onwards, certain transactions would have to be reported, not all, and I understand that transactions below that limit would be exempted, even when we talk about crypto-to-crypto exchange.

I expected much worse for Biden. In the EU legislation is underway to KYC all transactions, with no minimum exempt.

just like with internet sports gambling and online poker, no one wants to be doing business with american citizens. many sportsbooks and online poker sites stopped accepting americans.

As far as poker is concerned, this has been going on for more than 12 years now. They used to accept them illegally.

[zasad@]

According to the FATF rules, the KYC procedure must be completed for the sender and recipient of cryptocurrencies in the amount of more than $1,000. And until the recipient is unknown, the exchange should not allow such a transaction. We only need to prepare for the worst, because soon such restrictions will apply first to all large exchanges and then to medium and small ones. Nobody wants criminal charges.

no one wants the scrutiny of the IRS on them. because an audit won't just stop with investigating how much coffee they bought at starbucks using their bitcoin debit card. it's going to go into every thing on their entire tax return and income and everything so they can try and get as much out of that taxpayer as possible. just answering "YES" on the tax return about if you used crypto in the past year well you might as well be answering the question "Would you like for us to make an extra consideration to audit you?"

There is no need to overestimate the capabilities of the tax office. I will tell you an example from my country, Russia. In Russia, out of 80 million working-age population, approximately 25-30 million people do not work officially and do not even intend to pay taxes. All people have bank cards and the tax office can see their income and expenses. But in my region, for example, there are a million people, of which 300,000 do not pay taxes. And in the tax office, for these 300,000 people in the entire region, there are 100 tax inspectors who are not able to check all the people, and if a person is legally literate, then such an audit can take a very long time, because he will complain about the actions of the inspectors. Therefore, tax inspectors check only the largest tax evaders. It is not yet profitable to work with small ones.

[Dr.Bitcoin_Strange]

I guess that this new crypto tax rule might only last during the Biden administration, because during the tenor of the past US president, there was not much of this crypto regulation rule, which is why I believe that after Biden's tenor is over, this rule may not hold strong as it could also get dissolved.

I am not really cool with the rule because I am thinking that the tax regulatory authorities might be able to keep track of the total amount of money that any user is going to be investing into Bitcoin. It is also worrisome that people who are investing just as little as $20 consistently every week via DCA would have to pay tax on each transaction.

[zasad@]

I guess that this new crypto tax rule might only last during the Biden administration, because during the tenor of the past US president, there was not much of this crypto regulation rule, which is why I believe that after Biden's tenor is over, this rule may not hold strong as it could also get dissolved.

I am not really cool with the rule because I am thinking that the tax regulatory authorities might be able to keep track of the total amount of money that any user is going to be investing into Bitcoin. It is also worrisome that people who are investing just as little as $20 consistently every week via DCA would have to pay tax on each transaction.

Are you really sure that the rules depend on this president? The same rules are being introduced as a carbon copy in all countries, and there is nothing you can do about it. All financial transactions around the world will follow the same rules and there will be no anonymous payments.
If you have coins on centralized exchanges, then it is better to take all measures now and withdraw them to cold wallets if you are not a trader.

[larry_vw_1955]

There is no need to overestimate the capabilities of the tax office. I will tell you an example from my country, Russia. In Russia, out of 80 million working-age population, approximately 25-30 million people do not work officially and do not even intend to pay taxes. All people have bank cards and the tax office can see their income and expenses. But in my region, for example, there are a million people, of which 300,000 do not pay taxes. And in the tax office, for these 300,000 people in the entire region, there are 100 tax inspectors who are not able to check all the people, and if a person is legally literate, then such an audit can take a very long time, because he will complain about the actions of the inspectors. Therefore, tax inspectors check only the largest tax evaders. It is not yet profitable to work with small ones.

that's not how it works in the usa. so consider yourself lucky maybe. the irs uses computers to send out letters telling people what they owe.

As far as poker is concerned, this has been going on for more than 12 years now. They used to accept them illegally.

i know. and its never going to change. once they restrict your freedoms they are never coming back as poker proves.

[zasad@]

There is no need to overestimate the capabilities of the tax office. I will tell you an example from my country, Russia. In Russia, out of 80 million working-age population, approximately 25-30 million people do not work officially and do not even intend to pay taxes. All people have bank cards and the tax office can see their income and expenses. But in my region, for example, there are a million people, of which 300,000 do not pay taxes. And in the tax office, for these 300,000 people in the entire region, there are 100 tax inspectors who are not able to check all the people, and if a person is legally literate, then such an audit can take a very long time, because he will complain about the actions of the inspectors. Therefore, tax inspectors check only the largest tax evaders. It is not yet profitable to work with small ones.

that's not how it works in the usa. so consider yourself lucky maybe. the irs uses computers to send out letters telling people what they owe.

Do you think in Russia inspectors use wooden abacuses and send out notifications by pigeon mail? If you have heard about a system such as gosuslugi.ru, then this system allows a citizen to interact with all government bodies and services. From making an appointment with a doctor and selling a car and real estate to obtaining a pension certificate and sending any complaints right up to the Office of the President.
There are no analogues in the USA and Europe.
The tax office also has a separate large service for all taxpayers.

We've boasted, and now let's get down to business.
For example, a citizen received 3 transfers of 3 thousand dollars per month. The American IRS will consider this income and send a letter demanding payment of tax. And an obedient citizen will pay.
In Russia, it's not like that. The Russian will bring documents that this is not income, but money from the sale of his grandmother’s old wardrobe, which belonged to the family for many years. And the tax inspector will not be able to check this, because the time of the case is limited, and he does not have the resources to find another person in a large country

[larry_vw_1955]

We've boasted, and now let's get down to business.
For example, a citizen received 3 transfers of 3 thousand dollars per month. The American IRS will consider this income and send a letter demanding payment of tax. And an obedient citizen will pay.
In Russia, it's not like that. The Russian will bring documents that this is not income, but money from the sale of his grandmother’s old wardrobe, which belonged to the family for many years. And the tax inspector will not be able to check this, because the time of the case is limited, and he does not have the resources to find another person in a large country

you might be able to get away with that once or twice but the more you try and play that game at some point they're not going to believe you anymore. at least with the irs. and i doubt with any government.  they'll requiring proof of the sale so they can verify it and then you're in trouble. not only for lying to them that time but maybe in the past too.

Do you think in Russia inspectors use wooden abacuses and send out notifications by pigeon mail?

based on how you described how easy it is to commit fraud there yes it sounds like it. 

[zasad@]

We've boasted, and now let's get down to business.
For example, a citizen received 3 transfers of 3 thousand dollars per month. The American IRS will consider this income and send a letter demanding payment of tax. And an obedient citizen will pay.
In Russia, it's not like that. The Russian will bring documents that this is not income, but money from the sale of his grandmother’s old wardrobe, which belonged to the family for many years. And the tax inspector will not be able to check this, because the time of the case is limited, and he does not have the resources to find another person in a large country

you might be able to get away with that once or twice but the more you try and play that game at some point they're not going to believe you anymore. at least with the irs. and i doubt with any government.  they'll requiring proof of the sale so they can verify it and then you're in trouble. not only for lying to them that time but maybe in the past too.

Do you think in Russia inspectors use wooden abacuses and send out notifications by pigeon mail?

based on how you described how easy it is to commit fraud there yes it sounds like it. 

"Criminal Code of the Russian Federation Article 159:
Fraud, that is, the theft of someone else’s property or the acquisition of rights to someone else’s property through deception or abuse of trust."

What you call fraud is not fraud in Russia. This article is about non-payment of taxes by an individual. For example, a citizen received $10,000 from 1 person, then you can try to find the sender and prove non-payment of taxes, and if it is a transfer from 20-30 people for $200-500, then you need to take testimony from all of these people. No one will do this, and a citizen is not obliged to testify against himself and make the work of the tax inspector easier. The largest shadow market for exchanging cryptocurrencies in Moscow, you can easily exchange cryptocurrencies for tens of millions of dollars in cash there.
If the law works that way, then that’s how it should be. There is such a practice in the world: the better the standard of living, the fewer freedoms citizens have, but in Russia there are a lot of freedoms

[Zoomic]

I guess that this new crypto tax rule might only last during the Biden administration, because during the tenor of the past US president, there was not much of this crypto regulation rule, which is why I believe that after Biden's tenor is over, this rule may not hold strong as it could also get dissolved.

I am not really cool with the rule because I am thinking that the tax regulatory authorities might be able to keep track of the total amount of money that any user is going to be investing into Bitcoin. It is also worrisome that people who are investing just as little as $20 consistently every week via DCA would have to pay tax on each transaction.

Government is all about continuty. And it is not only the president that is the government of our country. The government is made up of both the legislative arm and the executive arm. If the law eventually passes through the judiciary legislature and confirmed by executive and enforced under a particular president. It means it has become a standard, any other incoming president will follow, for you not to follow shows that you have an interior motive. Which  might not be nice for the people of America. So, pray it shouldn't be enforced because it works, no more going back.

[joniboini]

Government is all about continuty. And it is not only the president that is the government of our country. The government is made up of both the legislative arm and the executive arm. If the law eventually passes through the judiciary legislature and confirmed by executive and enforced under a particular president. It means it has become a standard, any other incoming president will follow, for you not to follow shows that you have an interior motive. Which  might not be nice for the people of America. So, pray it shouldn't be enforced because it works, no more going back.

I'm not an expert on law by any means, but as far as I can remember some laws do change and a new president can introduce change or stop legislation from being enforced, as long as all involved bodies agree of course. Not sure if that will happen since most countries would likely want to tax crypto as aggressively as possible. AFAIK in my country any crypto transaction is taxed regardless of the volume, but you can still do P2P with no trouble. It is better for me since it allows me to pay less tax compared to before, although it doesn't contribute anything to privacy or data security at all.