Future safety of bitcoin tax report and clearance

[FortuneFollower]

This is definitely a serious problem. It's even more dangerous, especially for people living in countries where the rule of law doesn't work well and democracy is weak. Government officials who gain access to this sensitive information could abuse their position and put people with large amounts of crypto at risk. In today's world where privacy is very important, disclosing all your assets brings a major risk. Luckily I don't have assets big enough to worry about this. But it's a problem that seriously needs to be thought about.

Loopholes will be found as countermeasures to that, though, I agree, that we need to think now about it to not regret about this situation later.

[HajiBagi]

We do not know today, but tomorrow can be worse. The criminals are not just the bad people alone, they can be a well known people in the government office like the police and others. If you are reporting your tax, there are government officials that will sign it and stamp it to clear you.

If you are providing information in the tax report or clearance, it is very possible that all your source of income can be requested for. What if the government official is a bad person and carry out a wrench attack on you or supplying criminals with people's bitcoin information?

Why are you going to let the government officials or the police to know all about you? We know that sometimes we have to provide the information about the source of income but I don’t think it is necessary for me to tell a police officer about my bitcoin and other important things about me, there are somethings that should remain private and never let anyone know about it except your family members.

No one can be trusted because most government officials are criminals, most especially the corrupt police, they can do anything just to have their own percentage from you, for me, I don’t think the information is necessary unless you want them to know that you have a bitcoin or want to expose yourself, no any government official that will know you have bitcoin if you don’t tell them, so let be careful with what we do when we found ourselves in that situation.

[Ucy]

Well, you have the right to be private, unless maybe you did something really bad or terrible. But if you are not criminal, you can choose to not reveal where you keep your money if you don't feel safe revealing it. They could only have the right to compel you to reveal it if you did something wrong or probably for crime investigation that's strongly linked to you. Besides, after the investigation, and you are indeed innocent, you can always move your coins to other addresses.

So, if you are asked about your sources of income, and Bitcoin is one of them, you  just write Bitcoin. If they want you to be specific, you tell them exactly how you make your money through Bitcoin (you don't need to reveal where you hide your money to anyone). And if this is taxable because they provide the facilities or services you have not paid for, then they could tax you when you become profitable and withdraw to your bank account. Or a built in tax system that uses zkp-like tech could have the list of your online Bitcoin businesses and do the deduction when you are in profits, without revealing your funds/addresses or private info to anyone.

By the way, this is why it's important that bitcoiners are free/bright people who are qualified to be on their own and capable of defending themselves against fiat world that may want to take advantage of them

[Rgram]

If you are providing information in the tax report or clearance, it is very possible that all your source of income can be requested for. What if the government official is a bad person and carry out a wrench attack on you or supplying criminals with people's bitcoin information?

That’s a good one and something not really considered at this time given that, many of us and depending on our jurisdiction haven’t being subjected to these reports. There are no parastatals or agency that doesn’t have some rogued officials within its ranks and even though the agency might be generally marked as good, these elements do exist and can use your information to some evil conspiracy and mastermind.
Given how Bitcoin can be a one way traffic and how it takes just a key to have it in the custody of someone else and the means to making certain chain links disrupted, it raises real questions if, we are doing it right with these reports.

[ZAINmalik75]

We do not know today, but tomorrow can be worse. The criminals are not just the bad people alone, they can be a well known people in the government office like the police and others. If you are reporting your tax, there are government officials that will sign it and stamp it to clear you.

If you are providing information in the tax report or clearance, it is very possible that all your source of income can be requested for. What if the government official is a bad person and carry out a wrench attack on you or supplying criminals with people's bitcoin information?

This is normal, in many countries, they are doing it anyway. It is not only related to the earnings we make in crypto but earning make from bitcoin or crypto, is like a good starting point for such officers to blackmail. There was a case in my country, a YouTuber was arrested by the authorities because he was accused of promoting an illegal betting platform and they charged him with multiple cases, along with money laundering. Well, he was not doing it in the first place.
All cases were false. But the real game those officers played when they found out how much profit he was making from crypto, the amount was in 6 figures. They took it all and the amazing thing was that they did not report it on the papers, they moved those funds to their own wallets and somehow the victim came to know this because other people in the office were talking about it and word got to him. He is famous too.

So he asked them and they pressured him and his family for even more money until they did something terribly wrong by naming a different agency in the process, they got offended and they started their inquiry and now those officers are in jail and the man is out living his life.
The story was really interesting and it tells us, not only the people of my country but a lesson to everyone that always know your rights, don't fall for their lame threats which might look very real at the moment but they are just threating but they can't do a thing, they are also servants and obliged to follow the rules.

[purple_sparkles]

We do not know today, but tomorrow can be worse. The criminals are not just the bad people alone, they can be a well known people in the government office like the police and others. If you are reporting your tax, there are government officials that will sign it and stamp it to clear you.

If you are providing information in the tax report or clearance, it is very possible that all your source of income can be requested for. What if the government official is a bad person and carry out a wrench attack on you or supplying criminals with people's bitcoin information?

This is normal, in many countries, they are doing it anyway. It is not only related to the earnings we make in crypto but earning make from bitcoin or crypto, is like a good starting point for such officers to blackmail. There was a case in my country, a YouTuber was arrested by the authorities because he was accused of promoting an illegal betting platform and they charged him with multiple cases, along with money laundering. Well, he was not doing it in the first place.
All cases were false. But the real game those officers played when they found out how much profit he was making from crypto, the amount was in 6 figures. They took it all and the amazing thing was that they did not report it on the papers, they moved those funds to their own wallets and somehow the victim came to know this because other people in the office were talking about it and word got to him. He is famous too.

So he asked them and they pressured him and his family for even more money until they did something terribly wrong by naming a different agency in the process, they got offended and they started their inquiry and now those officers are in jail and the man is out living his life.
The story was really interesting and it tells us, not only the people of my country but a lesson to everyone that always know your rights, don't fall for their lame threats which might look very real at the moment but they are just threating but they can't do a thing, they are also servants and obliged to follow the rules.

I noticed that people with unhealthy psyches have come to power, and this is not a problem of just one particular country. Just remember the Epstein chronicles and the fact that the names of many officials appeared there. Power has rotted to the bone, countries are being run by sociopaths and perverts. What else can be expected from them. All these wars that are happening are the result of their rule. As for bitcoin, we are also facing similar extortion from various officials. It is like a cancerous tumor that is turning more and more states into parasitic structures over society. This has happened before in history, and the only solution back then was revolutionary movements. To be honest, I am very afraid of such times, they bring too much suffering. But at the same time, it is becoming increasingly impossible and dangerous to endure all the repression of authorities over the people.

[Alphakilo]

Its reported as income. Not as bitcoin.

You buy etf if you want anything about bitcoin mentioned in the papers.

Listen man. You just report how much you made when your done. No wild accusations.

What are you talking about? This thread is not about accusations, it is about how government officials can know people that are into crypto and use the opportunity to attack them or sell their information to bad people.

According to AI that I used, in the tax report, sources of income can be included:

Most countries with a developed, comprehensive income tax system require citizens and residents to list their various sources of income in their annual tax report. This practice ensures that all forms of income—including employment, investments, rentals, and foreign earnings—are correctly taxed.

So your post is somehow not relevant to what this topic is all about.

It's a norm anywhere in the world where taxing system works effectively. Even KYC requirements and AML policies on most centralized app or some apps these days would require you to fill in the source of income if you keep getting credited, not to talk of the taxing system that is almost an enforced rule for earners above a certain pay grade and is embedded into many  profit earning schemes, including gambling activities as a source of revenue to the government.

[YOSHIE]

If you are providing information in the tax report or clearance, it is very possible that all your source of income can be requested for. What if the government official is a bad person and carry out a wrench attack on you or supplying criminals with people's bitcoin information?

That is the advantage of Bitcoin, even though some countries have to pay taxes on digital assets, fortunately my country has not treated individual taxes on the Bitcoin assets we own, they still impose taxes on exchanges operating in my country.

I'm sure, with the current Bitcoin system being unable to be controlled, it will be a little difficult for evil governments to do bad things to crypto users, considering that Bitcoin is not regulated and certainly cannot be regulated.

[rat03gopoh]

Well, you have the right to be private,

Since Bitcoin is legal in your country and there are laws governing taxation, reporting your crypto assets is mandatory and must be disclosed transparently. There's no right to avoid it or simply say, "yeah, I have Bitcoin, the amount is so and so". You only have the right to have your assets protected as best as possible, even if in practice you don't receive it. Failure to report properly could result in sanctions.

[macson]

This is very possible, especially for those living in developing countries where officials are so corrupt. There are bound to be officials who check someone's tax details and discover they own Bitcoin and then start committing crimes to gain control of that person's Bitcoin, who knows? Especially when everything is clearly stated in the tax return.

This is the risk of allowing your identity to be connected to your Bitcoin. All your assets could be exposed, and at that point, your safety could be at risk.

[Rustam Meraj]

I think this makes Clearness Puzzle in which government attempts to stop money crime are without meaning to causing you to become target of real life theft and it is becoming more dangerous than ever to be seen rich owner.
Although you might never show personal keys to anyone in power, most useful plan to be safe is to move to Multi-Sign or managed holding so that, even in face of threat, you will not be able to take out money by yourself, which will totally remove threat of physical attack.

[X-ray]

I'm concerned by it but never really given it a deep thought. come to think of it, you're right.

Anyway, binance is able to prove their proof of reserve using zk-SNARKs without disclosing all on-chain wallet address, maybe it's possible to use the same technology for tax report?

https://www.binance.com/en/proof-of-reserves

[Die_empty]

We do not know today, but tomorrow can be worse. The criminals are not just the bad people alone, they can be a well known people in the government office like the police and others. If you are reporting your tax, there are government officials that will sign it and stamp it to clear you.

If you are providing information in the tax report or clearance, it is very possible that all your source of income can be requested for. What if the government official is a bad person and carry out a wrench attack on you or supplying criminals with people's bitcoin information?

The fear of exposing how much I am worth is one of the reasons why I am attracted to Bitcoin. We have had issues when bankers give out personal information of account holders to criminals. They even go as far as informing criminals when these rich people will come to the bank, so that they will be robbed or kidnapped.

You have raised an important observation about giving out financial and other data to tax officials. We live in a world where greed is common so I cannot overlook the security threat of these officers. Some part of our finance might have to remain undisclosed until there security guarantees.

[Easteregg69]

Poor people don't have that kind of problems.

Listen man. You can not do it wrong. If you do. Try again.

Just breaking ice here. Being in relief over how easy it is.

Buy a stack and stake it. Dividends get 100% reported if it's legit. You pay some percent of the yield in tax. Win-win.

You pay the police and the judges and buy some bank shares with it. They also pay tax. So you are in a union now.

0dayz style. We don't have any criminals around here.

[melinoe]

I think this makes Clearness Puzzle in which government attempts to stop money crime are without meaning to causing you to become target of real life theft and it is becoming more dangerous than ever to be seen rich owner.
Although you might never show personal keys to anyone in power, most useful plan to be safe is to move to Multi-Sign or managed holding so that, even in face of threat, you will not be able to take out money by yourself, which will totally remove threat of physical attack.

I wouldn't say the threat wouldn't be there, it's just that you wouldn't be able to access the funds.. but people that would attack you potentially wouldn't even understand that.