[2019-07-26] The IRS is warning thousands of cryptocurrency holders to pay taxes - page 4.

error08

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Quote from: Carlton Banks on September 21, 2019, 03:33:12 AM

Quote from: 1Referee on September 20, 2019, 04:22:35 PM

My question to you pretty much is; taking the above in consideration, what forms of taxes do you pay and not pay?

I simply avoid everything I can, and evade when it's smart to do so.

I like this kind of discussion, taxation is a legitimate robbery which difficult to avoid, and if we don't pay it, be prepared with the consequence.
I know someone who hasn't paid the vehicle tax for 2 years but almost reaches the limit of not paying it as if the officers accidentally find him, it will be the end of the freedom.
However, there are tons of people who don't pay taxes depending on where you live obviously, a different case if we are receiving warning letters from the IRS, nothing we can do to avoid it. Bitcoin holders will be safe only if they have never registered to an Exchanger and comply with the KYC. Even Localbitcoins recently changed its KYC/AML guidelines which required verification as well.

o_e_l_e_o

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Quote from: squatter on September 25, 2019, 06:12:41 PM

Link? I feel like the IRS wouldn't say that because their whole MO is to scare people into voluntary compliance.

I agree that the IRS are unlikely to say come out and directly say that (also interested in a link if you have one), but it is likely true.

They simply don't have the resources to investigate everyone who has ever bought bitcoin or another cryptocurrency, just like they don't have the resources to investigate every tradesman who is taking cash for various jobs and not declaring or paying tax on it. They will go after those who have bought or traded a sizeable amount (in this case, more than $20,000 through Coinbase), but spending time, money and resources on reclaiming a few hundred dollars in tax from smaller users would be a net negative for them. I have no doubt they will slap some hefty tax bills and fines on large volume users who haven't paid, and they may even go after a handful of smaller users to try to scare others in to complying. I have no doubt there will be another several rounds of threatening letters though. They want people to come clean on their own, because they can't audit everyone.

And as pointed out above, if you have been smart enough to avoid doing KYC at an exchange, it is extremely difficult for them to actually prove how much bitcoin you own or how long you have been holding it.

squatter

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STOP SNITCHIN'

Quote from: DaveF on September 25, 2019, 05:07:20 PM

Quote from: o_e_l_e_o on September 21, 2019, 08:29:05 AM

Yes. As far as I know, the IRS hasn't said where they are getting their info from, and I'd be surprised if they ever did since people would then know to avoid those methods. However, there have been loads of users on this forum and on reddit who have confirmed that Coinbase shared their details and they also received the tax letters.

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

It's going to be interesting to see how far back they go and how much they go looking for.

When the IRS originally issued the summons for Coinbase user data, they were looking for everyone "active between 2013 and 2015." To me, that gives a pretty clear indication that 2013 is the limit of what they're planning to investigate.

Quote from: DaveF on September 25, 2019, 05:07:20 PM

The IRS has stated that below a certain amounts unless there is another reason to go after you they don't even try to collect. No letter, no nothing it's just kind of sitting there in their computers.

Link? I feel like the IRS wouldn't say that because their whole MO is to scare people into voluntary compliance.

DaveF

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Quote from: o_e_l_e_o on September 21, 2019, 08:29:05 AM

Quote from: chaoscoinz on September 21, 2019, 07:58:35 AM

Do you know if this is a follow up to the coinbase subpoena that requested information regarding customers who have transactions over $20,000 or more?

Yes. As far as I know, the IRS hasn't said where they are getting their info from, and I'd be surprised if they ever did since people would then know to avoid those methods. However, there have been loads of users on this forum and on reddit who have confirmed that Coinbase shared their details and they also received the tax letters.

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

It's going to be interesting to see how far back they go and how much they go looking for.
The IRS has stated that below a certain amounts unless there is another reason to go after you they don't even try to collect. No letter, no nothing it's just kind of sitting there in their computers.

-Dave

figmentofmyass

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Quote from: bryant.coleman on September 25, 2019, 10:37:07 AM

Well.. if you are claiming for long-term holding, then you need to show the proof of purchase from that time.

that's the surefire way to beat an audit, but it may not be necessary. records can be lost due to reasons beyond your control. the IRS asks that you make reasonable and good faith efforts to comply.

if you bought bitcoins with cash, p2p etc years ago it would be reasonable not to have any verifiable records. there are also many defunct exchanges---if you used one of them, it's reasonable not to have complete records.

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Quote from: Carlton Banks on September 24, 2019, 01:31:55 PM

Quote from: Vishnu.Reang on September 24, 2019, 11:41:31 AM

Laws can vary from country to country. I am residing in India and here we need to pay capital gains tax on profits arising from the sale of any asset. The gains qualify as long term capital gains if held for more than three years (liable to a tax of 20% minus indexing) and in case it was being held for less than three years then it will be treated as short term capital gains (equivalent to regular income, subject to ordinary income tax with highest slab at 42%).

Don't take this as tax advice or anything ( Grin

) but it's very difficult to prove exactly how long you've really been holding the money for. The blockchain is not an accurate record for length of possession, only for when transactions happened. Think about that Wink

Well.. if you are claiming for long-term holding, then you need to show the proof of purchase from that time. Blockchain transaction won't be enough for this purpose, as it will be having zero information regarding the price of the coins and the identity of the buyer/seller. In the tax return, you may need to give details of the exchange log, and the bank transaction. Now things can get complicated if you claim that you purchased crypto for physical cash. In such cases, you won't be having any other proof with you (other than the Blockchain transaction).

Carlton Banks

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Quote from: Vishnu.Reang on September 24, 2019, 11:41:31 AM

Laws can vary from country to country. I am residing in India and here we need to pay capital gains tax on profits arising from the sale of any asset. The gains qualify as long term capital gains if held for more than three years (liable to a tax of 20% minus indexing) and in case it was being held for less than three years then it will be treated as short term capital gains (equivalent to regular income, subject to ordinary income tax with highest slab at 42%).

Don't take this as tax advice or anything ( Grin

) but it's very difficult to prove exactly how long you've really been holding the money for. The blockchain is not an accurate record for length of possession, only for when transactions happened. Think about that Wink

Vishnu.Reang

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Quote from: malevolent on September 22, 2019, 10:30:23 AM

Quote from: Vishnu.Reang on September 22, 2019, 01:48:32 AM

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

Either there's VAT on the coins, it's included in the price, and the seller pays it he has a VAT-registered business (and later gets it back), or VAT doesn't apply/he's not selling as a business and there's no VAT. Capital gains tax or income tax might not apply, where I'm from I don't have to pay it if I hold onto coins for >6 months.

Laws can vary from country to country. I am residing in India and here we need to pay capital gains tax on profits arising from the sale of any asset. The gains qualify as long term capital gains if held for more than three years (liable to a tax of 20% minus indexing) and in case it was being held for less than three years then it will be treated as short term capital gains (equivalent to regular income, subject to ordinary income tax with highest slab at 42%).

malevolent

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Quote from: Vishnu.Reang on September 22, 2019, 01:48:32 AM

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

Either there's VAT on the coins, it's included in the price, and the seller pays it he has a VAT-registered business (and later gets it back), or VAT doesn't apply/he's not selling as a business and there's no VAT. Capital gains tax or income tax might not apply, where I'm from I don't have to pay it if I hold onto coins for >6 months.

Guardian.P

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Pandora's Tokens Bounties

Quote from: Guardian.P on September 22, 2019, 07:43:58 AM

Quote from: Vishnu.Reang on September 22, 2019, 01:48:32 AM

Quote from: Guardian.P on September 19, 2019, 04:53:39 AM

What nonsense, if I buy a crypto from my salary, then I will pay tax again? This is a robbery! Tax on tax. When you buy the currency of another country in the exchanger do you also pay tax?

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

I work at work, earn money, pay taxes and have the right to buy anything you like for this money, do you think that I have to pay another tax for every purchase? there are so many taxes on one product, I bought a product on it, I already paid tax, the seller, + they take a tax on salaries, 3 taxes on one product, then I will sell this product to you and pay the tax again? will you still sell this product to someone and also pay tax, what service did the state provide you to buy this product, and do you still have to pay for the service? (let's say that the product is some kind of token)

It's just ridiculous, let me sell you a product, and then you sell me the same product, let's do it 100 times, and for all operations we will pay 100 times tax each? Solving the problem, each product must be indexed on the blockchain network, that a tax has been paid for it! the only way to defeat the robbery by the state! One tax on one item always !!!

Guardian.P

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Quote from: Vishnu.Reang on September 22, 2019, 01:48:32 AM

Quote from: Guardian.P on September 19, 2019, 04:53:39 AM

What nonsense, if I buy a crypto from my salary, then I will pay tax again? This is a robbery! Tax on tax. When you buy the currency of another country in the exchanger do you also pay tax?

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

I work at work, earn money, pay taxes and have the right to buy anything you like for this money, do you think that I have to pay another tax for every purchase? there are so many taxes on one product, I bought a product on it, I already paid tax, the seller, + they take a tax on salaries, 3 taxes on one product, then I will sell this product to you and pay the tax again? will you still sell this product to someone and also pay tax, what service did the state provide you to buy this product, and do you still have to pay for the service? (let's say that the product is some kind of token)

coolcoinz

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Quote from: malevolent on September 21, 2019, 02:11:30 PM

Quote from: o_e_l_e_o on September 21, 2019, 08:29:05 AM

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

That applies to foreign exchanges, too, if someone has any doubts. A lot of countries have treaties or similar agreements signed between them to share financial information for tax purposes, and a lot of people, except maybe those who live in the poorest 3rd world countries, may one day find out they have unpaid taxes to pay if they ever went through KYC.

Funny thing, but the exchanges where I actually went through KYC went bust and the data is most likely gone along with them. Some other exchanges that I bought my coins on also went bust and disappeared or got hacked, or whatever. If you got lucky like me, hodl and don't go through KYC ever again to limit your chances of those mobsters from the government destroying your life.

Vishnu.Reang

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Quote from: Guardian.P on September 19, 2019, 04:53:39 AM

What nonsense, if I buy a crypto from my salary, then I will pay tax again? This is a robbery! Tax on tax. When you buy the currency of another country in the exchanger do you also pay tax?

Let me ask you another question. If you buy gold coins from your salary, would you refuse to pay the applicable VAT/GST? And once you sell your coins later for fiat cash, would you again refuse to pay the capital gains tax? You can't do that, as there are laws specifying the requirement to pay taxes. The same with cryptocurrency. Now crypto is mostly being used as an investment asset, rather than as a currency. So you can't refuse to pay taxes.

1Referee

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Quote from: Carlton Banks on September 21, 2019, 03:33:12 AM

Quote from: 1Referee on September 20, 2019, 04:22:35 PM

My question to you pretty much is; taking the above in consideration, what forms of taxes do you pay and not pay?

I simply avoid everything I can, and evade when it's smart to do so.

find people growing food, and buy directly from them. there's a high chance it will be healthier, as they will have an actual conscience
find independent businesses that sell other stuff for your home. try to get things from people outside your local gangster turf, it's harder for them to track the paper trail, so the people you buy from are more likely to use it as an opportunity to evade taxes themselves
don't use the postal system for any of this, as the postal system is subsumed into your local gang's tax reporting

In most of these cases, it's not possible to stop people you trade with from paying some taxes, it's hard to be a business and avoid scrutiny of your finances. But the world's a big place, you can find businesses who trade outside of scrutinizers, if you just look for them Wink

That's next level. I definitely didn't see that coming, so thanks for the insight.

I thus far have mainly focused on whatever I hold outside the banking system in terms of wealth, which comes down to not declare any of my cold wallet Bitcoin holdings, and not declare what I have in physical Gold. It's so silly that I have to do this, but the other option is to hand these government criminials 1-1.5% annually, which I won't ever be doing.

It's one very arguable thing to tax profits, but to annually tax people's net worth that hasn't been touched in years is the most retarded thing ever. This blatant form of theft should never be rewarded.

figmentofmyass

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Quote from: chaoscoinz on September 21, 2019, 07:58:35 AM

Quote from: figmentofmyass on July 27, 2019, 12:08:47 AM

10k+ taxpayers are receiving warning letters from the IRS. there are 3 types of letters---one is just a "soft notice" that is information-only, not alleging any misreporting. the other two are a bit more threatening. this is how one user on reddit described them:

Quote

6174: Basically means they know you have crypto
6174-A: Basically means they think you broke the law and haven't paid your taxes, and may or may not start enforcement actions on you soon
6173: Means they are sure you broke the law, and are coming after you now.

Do you know if this is a follow up to the coinbase subpoena that requested information regarding customers who have transactions over $20,000 or more?

the consensus is that's the primary source of the IRS data used in this campaign. most people who reported receiving letters confirmed that.

at this point, there are other american exchanges that send the 1099-k though, like gemini. if the IRS received a 1099-k from gemini and you reported nothing, i'm confident you'd receive a letter too.

o_e_l_e_o

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Quote from: malevolent on September 21, 2019, 02:11:30 PM

A lot of countries have treaties or similar agreements signed between them to share financial information for tax purposes

Not just for tax purposes, but for general mass surveillance and spying on their citizens. The Five/Nine/Fourteen Eyes countries, for example, spy on their own and each other's citizens, and share all that information between themselves. And if you think the spying programs we know about are bad, just think about all the ones that the public has no idea exist.

Exchanges initially existed in an unregulated space providing a product (bitcoin) that government's hadn't heard of. Now every government knows about bitcoin and will regulate any company which tries to operate within its borders. It won't be long before every exchange will be handing over details of all their customers or face being shutdown. And when faced with a choice between profits or protecting customer privacy, I have zero doubt that every currently operating exchange will pick the route which maintains their own profits. Once those details are in the hands of one government, it won't be long before they are in the hands of the US and shared with all its allies.

Simple solution; don't do KYC, trade peer to peer.

malevolent

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Quote from: o_e_l_e_o on September 21, 2019, 08:29:05 AM

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

That applies to foreign exchanges, too, if someone has any doubts. A lot of countries have treaties or similar agreements signed between them to share financial information for tax purposes, and a lot of people, except maybe those who live in the poorest 3rd world countries, may one day find out they have unpaid taxes to pay if they ever went through KYC.

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Quote from: o_e_l_e_o on September 21, 2019, 08:29:05 AM

Quote from: chaoscoinz on September 21, 2019, 07:58:35 AM

Do you know if this is a follow up to the coinbase subpoena that requested information regarding customers who have transactions over $20,000 or more?

Yes. As far as I know, the IRS hasn't said where they are getting their info from, and I'd be surprised if they ever did since people would then know to avoid those methods. However, there have been loads of users on this forum and on reddit who have confirmed that Coinbase shared their details and they also received the tax letters.

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

I knew this would happen eventually, due to regulatory bodies cracking down on crypto. It also explains why Huobi Global and Binance have taken the initiative to open American based exchanges, while blocking further access from new account signups for U.S citizens.

o_e_l_e_o

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Quote from: chaoscoinz on September 21, 2019, 07:58:35 AM

Do you know if this is a follow up to the coinbase subpoena that requested information regarding customers who have transactions over $20,000 or more?

Yes. As far as I know, the IRS hasn't said where they are getting their info from, and I'd be surprised if they ever did since people would then know to avoid those methods. However, there have been loads of users on this forum and on reddit who have confirmed that Coinbase shared their details and they also received the tax letters.

The IRS are likely receiving similar information from a number of exchanges, and will continue to push harder and harder until all exchanges hand over all customer details. If you have ever completed KYC on any exchange, at some point in the future the IRS will likely find out your trading history.

chaoscoinz

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Quote from: figmentofmyass on July 27, 2019, 12:08:47 AM

10k+ taxpayers are receiving warning letters from the IRS. there are 3 types of letters---one is just a "soft notice" that is information-only, not alleging any misreporting. the other two are a bit more threatening. this is how one user on reddit described them:

Quote

6174: Basically means they know you have crypto
6174-A: Basically means they think you broke the law and haven't paid your taxes, and may or may not start enforcement actions on you soon
6173: Means they are sure you broke the law, and are coming after you now.

here's the article from CNBC. an excerpt:

Quote

If you own bitcoin or other cryptocurrencies, you might want to check your mailbox.

The Internal Revenue Service is in the process of sending letters to U.S. citizens who own virtual currency and potentially failed to pay the necessary taxes and to those who improperly reported taxes on digital assets last year, the agency announced Friday.

“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties,” IRS Commissioner Chuck Rettig said in a news release. “The IRS is expanding our efforts involving virtual currency, including increased use of data analytics.”

The agency said it started sending out letters last week that by the end of August will reach 10,000 taxpayers. The list of names was obtained through “various ongoing IRS compliance efforts.” In some cases, the IRS said taxpayers could be subject to criminal prosecution.

Last year, popular trading platform Coinbase alerted 13,000 customers that it was complying with a court order to provide the IRS with information on accounts worth at least $20,000 from the years 2013 to 2015. The IRS did not say whether its mailing list was a result of the Coinbase disclosures.

and also an insightful article written by a tax attorney on the subject: Crypto Investors Don't Need To Panic About IRS Letter 6174-A, Here's Why

Do you know if this is a follow up to the coinbase subpoena that requested information regarding customers who have transactions over $20,000 or more?

Topic: [2019-07-26] The IRS is warning thousands of cryptocurrency holders to pay taxes - page 4. (Read 1220 times)