Report my Bitcoin earnings to the IRS? No way!

[moriartybitcoin]

With tax day fast approaching in the United States, the subject of Bitcoin and taxation has been all over the news lately.

Over the past several years, Bitcoin miners, investors and startups have enjoyed a huge financial boon from the Bitcoin price explosion.  As Bitcoiners, are we required to cough up real money to the IRS?

According to the US Government, we owe the IRS some cash.  Profits from Bitcoin mining are taxable and profits from Bitcoin investments fall under the capital gains tax.  Yes, we owe the government money. But should we pay?

No, I don't think so.

The power to tax is the power to destroy.  The Federal Reserve banking cartel understands the danger of Bitcoin eventually eclipsing fiat currency.  They are, frankly, terrified.  The US hasn't banned Bitcoin because it is not yet in mainstream usage.  Stores don't accept Bitcoin. Most people don't own Bitcoin.  Bitcoin might have entered the public lexicon, but it hasn't entered the public wallet.  At least not yet.

But the IRS and the Federal Reserve would love to establish a precedent of taxation for Bitcoin.  Should they eventually feel threatened enough to severely restrict it, they could easily tax Bitcoin into oblivion. 

Already the government is seeking to regulate Bitcoin as a monetary instrument, hence the recent arrests of LocalBitcoin exchangers in Florida and the indictment of Charlie Shrem.  By regulating Bitcoin, they ensure that the large Bitcoin companies (CoinBase, etc) will enjoy a monopoly, becoming extremely vulnerable to government regulation and taxation. Small players will be forced out of business and new players will have a hard time getting into the game.  This has always been the model for banking in the United States and they are applying the same restrictive template to Bitcoin. 

The government doesn't need to ban Bitcoin. All they need to do is impose taxes and regulation sufficient to keep the big Bitcoin companies on top, and the little guys out of the game.

My name is Dr. Michael Moriarty, and I own the Bitcoin Network of 50+ Bitcoin related sites, including https://BitPlastic.com, https://CoinChimp.com, https://BitLaunder.com and many more.  We are not going to pay 1 cent to the IRS or any other government agency.  Nor do we verify the identity of our customers.  Nor do we report our customer's financial transactions to any government agency whatsoever.

The beauty of Bitcoin is that the average person can use it to escape from the fiat currency ponzi scheme that characterizes our modern banking system.  By reporting your Bitcoin earnings to the IRS, you are implicitly embracing their financial scam and becoming part of it.

Beverely Rubik says 'you can recognize a pioneer by the arrows in his back.'  Maybe the IRS will put some arrows in my back, but they will have to find me first :-)

[Singlebyte]

With tax day fast approaching in the United States, the subject of Bitcoin and taxation has been all over the news lately.

Lol...I stopped reading after the first sentence.  Tax day has come and gone already.  Today is the 16th of April!

[Meuh6879]

pro make invoice ... invoice have tax.
so, what is the problem ?

the problem is the bank ... when people realize that his economy is more safe in bitcoin than in the bank.

[mgio]

Have fun in jail!

It doesn't matter if you own a pizza palor, mine bitcoins, or sell drugs.

You always owe taxes!

Why don't you move to a country where there are no capital gains tax and no income tax.

As long as you live in the US or are an US citizen you will be breaking the law and the IRS will catch up with you.

[zolace]

The first thing that happens after you file your tax return is that the IRS computer automatically checks it for mathematical and demographic accuracy.  If the return was submitted in proper form and appears to be error free, then the IRS accepts it and begins to process your refund or generate a bill for any tax due

[blackhathasher]

The IRS has no legal authority in my domain. I do not recognize them.

[cryptoanarchist]

Have fun in jail!

It doesn't matter if you own a pizza palor, mine bitcoins, or sell drugs.

You always owe taxes!

Why don't you move to a country where there are no capital gains tax and no income tax.

As long as you live in the US or are an US citizen you will be breaking the law and the IRS will catch up with you.

Seems like the pro-tax argument always amounts to the threat of being put in a cage. That's called "extortion". Taxes = Extortion. Get it?

[Deviant1]

Is Bitplastic still operating? I read in a couple of places that it is a confirmed scam.

[Beliathon]

It doesn't matter if you own a pizza palor, mine bitcoins, or sell drugs.

I own a pizza parlor that sells cocaine-covered pizza, in our basement is a server farm mining Bitcoins. We've got guns. Lots of guns. We've also got solid communication and high-tech security.

We haven't paid taxes since 1989. We've got the right friends. Whatcha gonna do?

[Soros Shorts]

Have fun in jail!

It doesn't matter if you own a pizza palor, mine bitcoins, or sell drugs.

You always owe taxes!

Why don't you move to a country where there are no capital gains tax and no income tax.

As long as you live in the US or are an US citizen you will be breaking the law and the IRS will catch up with you.

Plenty of cash only businesses under-report their earnings. Some get caught, many don't. If you know the tools that the IRS uses to catch these types of tax evaders (I do) it would be easy to keep your BTC-to-cash transactions under the radar and get away with this indefinitely. Even with a random audit. However, if the IRS for some reason or other opens a criminal investigation on you then it is a different story ...

[mgio]

Have fun in jail!

It doesn't matter if you own a pizza palor, mine bitcoins, or sell drugs.

You always owe taxes!

Why don't you move to a country where there are no capital gains tax and no income tax.

As long as you live in the US or are an US citizen you will be breaking the law and the IRS will catch up with you.

Plenty of cash only businesses under-report their earnings. Some get caught, many don't. If you know the tools that the IRS uses to catch these types of tax evaders (I do) it would be easy to keep your BTC-to-cash transactions under the radar and get away with this indefinitely. Even with a random audit. However, if the IRS for some reason or other opens a criminal investigation on you then it is a different story ...

Yes, but I doubt the OP is running a cash-only business with which he can use to launder his money.

The second he sells $5k worth of coins on Coinbase, wires in $5k from a sale on Bitstamp, deposits a check for $5k from CampBX, or $5k in cash from sales he made on localbitcoins, his bank is likely secretly filling out forms and reporting him. They won't tell him and in fact, they are not allowed to. Try to break up the deposits into smaller amounts and you'll be charged with structuring, which is a much more serious crime. I suppose you could use localbitcoins and keep it all in cash and spend it slowly. Try doing that with $100k+ though without attracting any suspicions. You become very limited with what you can do with your money. Fancy dinners are probably ok. Jewelry and sports cars are not.

So, yes, once that money hits your bank account, you run the risk of getting audited. And if you are audited, you'll have to explain it to the IRS. Yes, you can launder it, it happens all the time, and lots of people get away with it. But lots get caught too.

If you made <$5k from your bitcoins then really who gives a sh*t anyways. The IRS isn't going to care about that amount of chump change and frankly, as an honest taxpayer, I don't really care about that amount either.

[BittBurger]

IRS law IRS6050

Were you all aware that the IRS actually made a rule / law that as long as you are:

*  Under $20,000 in billable transaction income

AND

*  Have fewer than 200 billable transactions ...

Companies like PayPal don't even need to report a 1099?

Think about that. 

You could have $20 million in billable income through paypal and if you have 199 transactions, no 1099.

https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W

Interesting to see how certain rules were put in place that seem to completely violate both common sense, and well-established laws.

I assume the same rule should be applied to Coinbase.

-B-

[Foxpup]

*  Under $20,000 in billable transaction income

AND

*  Have fewer than 200 billable transactions ...

Companies like PayPal don't even need to report a 1099?

Think about that. 

You could have $20 million in billable income through paypal and if you have 199 transactions, no 1099.

It appears you're confused as to the meaning of the word "and", so let me help you. "And" means "both of the things". If you only have one of the things, but not the other, that's an "or" situation. Having $20 million in 199 transactions only satisfies the second condition, not the first. That's only one of the things, not both, so you're not meeting the requirements for "and". You need to have both less than $20,000 in transaction income and fewer than 200 transactions to be exempt from the reporting requirements.

[moriartybitcoin]

That's an off-topic comment for this thread but I'm going to address it since it affects my reputation.

No, BitPlastic is not a scam.  Point me to any forum thread which suggests otherwise and I will address the accuser publicly and attempt to resolve any dispute.

Unfortunately, there are SO MANY scams these days, that just about anyone will scream SCAM if they have the slightest issue with a service.  I respond to customer emails within hours and attempt to do my very best to make everyone happy, but there is always someone who simply cannot be appeased. 

I own 50+ Bitcoin sites and I make plenty of money off fees; I have no interest in scamming anyone, ever.

[seriouscoin]

*  Under $20,000 in billable transaction income

AND

*  Have fewer than 200 billable transactions ...

Companies like PayPal don't even need to report a 1099?

Think about that. 

You could have $20 million in billable income through paypal and if you have 199 transactions, no 1099.

It appears you're confused as to the meaning of the word "and", so let me help you. "And" means "both of the things". If you only have one of the things, but not the other, that's an "or" situation. Having $20 million in 199 transactions only satisfies the second condition, not the first. That's only one of the things, not both, so you're not meeting the requirements for "and". You need to have both less than $20,000 in transaction income and fewer than 200 transactions to be exempt from the reporting requirements.

For what is worth, he used "AND" correctly. However he misinterpreted it

[Pente]

Have fun in jail!

It doesn't matter if you own a pizza palor, mine bitcoins, or sell drugs.

You always owe taxes!

Why don't you move to a country where there are no capital gains tax and no income tax.

As long as you live in the US or are an US citizen you will be breaking the law and the IRS will catch up with you.

I never agreed to be a US citizen. Trying to tax me, just for being born here, even when I live in another country is straight extortion.

[turvarya]

Have fun in jail!

It doesn't matter if you own a pizza palor, mine bitcoins, or sell drugs.

You always owe taxes!

Why don't you move to a country where there are no capital gains tax and no income tax.

As long as you live in the US or are an US citizen you will be breaking the law and the IRS will catch up with you.

I never agreed to be a US citizen. Trying to tax me, just for being born here, even when I live in another country is straight extortion.

poor you, that you haven't been born in another country like the Ukraine ...

[Pente]

Have fun in jail!

It doesn't matter if you own a pizza palor, mine bitcoins, or sell drugs.

You always owe taxes!

Why don't you move to a country where there are no capital gains tax and no income tax.

As long as you live in the US or are an US citizen you will be breaking the law and the IRS will catch up with you.

I never agreed to be a US citizen. Trying to tax me, just for being born here, even when I live in another country is straight extortion.

poor you, that you haven't been born in another country like the Ukraine ...

I would move there if they would grant me citizenship for free!

[runam0k]

Seems like the pro-tax argument always amounts to the threat of being put in a cage. That's called "extortion". Taxes = Extortion. Get it?

It's not a "pro-tax" argument, it's a statement of fact: get caught and you will go to jail.

The pro-tax argument would be that we, the people and citizenship of the US, collectively decided some time ago that each of us should contribute a small portion of our income and any capital gains to pay for the government and the services it performs.

I never agreed to be a US citizen. Trying to tax me, just for being born here, even when I live in another country is straight extortion.

Renounce your citizenship.

[5flags]

It's not a "pro-tax" argument, it's a statement of fact: get caught and you will go to jail.

It comes down to a decision, resist injustice, or fund injustice.