Topic: [2017-09-12] Only 802 People Paid Taxes on Bitcoin Profits, IRS Says (Read 5531 times)

Very nice mate. Well we are a just lucky that our government are "not" yet taxing people who are involved in the crypto world. But its just a matter of time before they do. Exchanges though in our country have been regulated but eventually Central Banks and Government Tax Agency will be at our coat tail demanding us to pay. I'm not really sure what threshold would be in our country but its below €5000 as well so keep yourself under the radar. But worse comes to worse, I have to no choice but to pay taxes as well. We will see.

I'm lucky that my country still not implementing taxes on cryptocurrencies that is owned by an individual. I will just take this chance to make more bitcoins and encash it because I know sooner they will charge taxes regarding with these assets.

People as for me are simply reinsured, because now catching a person to make a profit from the crypt is a rather complicated mechanism. And if everything is clever to do, and not to cashed in large sums, then there will be no suspicions, and therefore there will be no taxes on profits either.

This is quite expected as the government thru the IRS will find many creative ways and regulations inorder to bring people to pay the due taxes that should be remitted to the government. In my point of view, this is nothing new as the IRS have been known doing the same thing in the past. Their job is to collect taxes and we have to let them do their job. Good citizens have the responsibility to pay their taxes and one of the reasons why we have regulations is because many failed to follow the law (including myself though I am not based in USA for that matter). For now, it is a matter of the cat and the mouse...who will caught eventually would experience some hell while on Earth (some pun intended!).

The actual number the IRS should report is 803.   I paid capital gains on bitcoin a couple times.  I'm not included in the 802 number because I declined to put the word "bitcoin" on the form.  I felt it would invite further scrutiny.  I did not use a broker, so the the IRS would have no way to categorize anything as bitcoin related.

So,  please, whenever anyone tells you that only 802 people paid taxes on bitcoin capital gains,  inform them that the number is actually 803.

Thanks!

If you play it smart, you can continue to not pay any tax over your gains for quite a long time. However, I have the feeling that at some point (if it isn't the case already) exchanges will be forced to snitch on people, by handing over every information related to what you bought, sold, gained, deposited, cashed out, etc, to the government. I am already at a stage where I can't just cash out my Bitcoins to have the funds sent to my bank account without the bank being forced to hand over all information to my local government. I have to keep everything below the €5000 level every month to not trigger any bells. I just can't stand it to pay tax over something the government has nothing to do with.

Can't really blame those people for not paying. If there is no body that knows you have bitcoins, why would you even think of paying taxes? It would just cut profits. Then again, unless you really did profit off bitcoins that is the only time you should be paying taxes. If your assets remain bitcoins then it is paper gains and not taxable like how stocks work.

Talk about investing in Bitcoin and the news of people becoming ‘bitcoinnaires’ are almost everywhere these days – newspapers, TV’s, radio, and the Internet. However, one thing is missing from these stories: the tax man.

Yes, Virginia, Bitcoin is taxable
The IRS began issuing guidance on taxation of Bitcoin in March 2014. At that time, the agency announced that Bitcoin would be treated as property, with loss or gains being treated as capital loss or capital gains for tax purposes.

Readers are probably familiar with the many “rags-to-riches” stories about Bitcoin investors becoming millionaires almost overnight. Such stories abound, from the Idaho teenager who turned $1,000 into $1.1 mln and the Norwegian engineer who made $800,000 in profit off a $24 investment.

None of these stories mention the taxes these individuals paid...or didn’t pay.

Catch me if you can
Given Bitcoin’s crypto-anarchist roots, it’s perhaps not surprising that some seem to take the idea of taxation lightly. Many believe that since Bitcoin is pseudo-anonymous, there’s no way the IRS will find out about their taxable gains. Yet they may be wrong.

Bitcoin isn’t as anonymous as many think, as evidenced by the number of people in federal prison who paid in Bitcoin for child pornography or illegal drugs. There are a number of companies that scour the Blockchain, seeking to link Bitcoin accounts to their actual owners.

Earlier this month, the IRS was found to have been partnering with a company called Chainalysis to double down on its efforts to monitor Bitcoin traders who engage in high frequency and volume trading.

The IRS has recently been focusing on Coinbase, demanding that the exchange reveal the identity of anybody who traded more than $20,000 in Bitcoin per year between 2013 and 2015. The IRS is probably correct in their belief that many Bitcoin owners are evading taxes. In the year 2015, only 802 Americans told the IRS about their Bitcoin-related capital gains or losses, according to Fortune. 

How can Chainalysis help IRS?
Founded in 2014, Chainalysis is an anti-money laundering software for Bitcoin. Through its formal partnerships with Europol and other international law enforcement agencies, Chainalysis’ investigative tools have been “used globally to successfully track, apprehend, and convict money launderers and cybercriminals.”

It’s important to remember that Bitcoin’s Blockchain is, by its very nature, totally transparent. Every transaction that has ever occurred is listed in that decentralized ledger, and transactions can be followed through the Blockchain using sophisticated software. The only thing that gives Bitcoin any semblance of privacy is the fact that it uses random addresses which are not necessarily associated with a user’s real-world identity.

It’s wise to remember, though, that people leak information about themselves all the time. Many people even publicly post their Bitcoin address on Internet forums. If they were to turn around and use this same address, or one associated with it, for illegal activity then their identity could be unmasked.

Given that 2017 has been a banner year for cryptocurrencies, it wouldn’t be surprising to see Bitcoin and other digital currencies high on the IRS’ list of priorities.

https://cointelegraph.com/news/only-802-people-paid-taxes-on-bitcoin-profits-irs-says