Topic: [2020-12-17] IRS is trapping bitcoin and altcoin investors on 2020 tax form - page 2. (Read 410 times)

some indeed do, with differing degrees of success (and differing degrees of opting out). The state often (not always) pursues them for taxes on services they did not use. The speculation as to why the state reacts that way is that more and more people might begin to rationalize how their taxes are spent, and would want to at least get more control over what they are spent on, to encourage public spending they deem wise and discourage that of which they disapprove. This would remove alot of state decision making power (and probably several layers of state bureaucracy also)

It would also be more democratic, which I heard was the name of the game we are (supposedly) playing.

Like it or not, alot or people take seriously how their money is spent in the name of the public good, and strongly dislike not being able to prevent spending on areas that have consistent 100% bipartisan approval (e.g. war or corporate tax breaks). These people are attracted to Bitcoin, as it seem like a way to exert the control they seek.


Satoshi (and the other cypherpunks) absolutely knew that this would be one of the most disruptive aspects of decentralized money: it was a design goal. I hope everyone's prepared for the full implications of this, regardless of their own perspective.

Fortunately, it is so, otherwise, it would be anarchy and we would return to the time of the far west with the cowboys.
In modern society, you need a leader to lead (no matter what politic you apply).

No matter who's sitting in the White House it's impossible to make everybody happy. There will always be a group of people who think that the state is not doing its job (the opposition). Perhaps a coalition politic should be mandatory to work together.
When someone feels the right to opt-out then it's ok but they should also opt-out for the free school their kids get, the electricity in streets, welfare, the swimming pools in the city, the roads, the retirement pension, any infrastructures paid by other citizens who agree to pay the taxes

Because they can't claim, if there is something to pay they opt out but if there is money to take there are here. Would they return the stimulus check, I guess no

Look, some people were preaching for Bitcoin to be regulated to help the mass adoption. Now there are taxes they want to opt-out


That's a geopolitical side, the colonial countries were much more devastating than that. Then what? we shouldn't pay our taxes? If the person leading the country is not the right person to do it, it's another story. In this case, there is something simple called the elections.
But those who pay their taxes correctly have not to be penalized by those who do not pay.

if only. they haven't made any substantive changes to the reporting requirements since 2011 when they began requiring the extremely tedious form 8949.

i can think of 3 reasons why they added this question to schedule 1 last year, and now to the main form this year: 1. people are generally fearful of the taxman and seeing this question will simply scare a lot of casual tax avoiders into ponying up. 2. they wanna use this question in combination with 1099s and similar means to quickly flag noncompliance so they can send taxpayers a bill with penalties, and 3. the perjury/falsified return angle pointed out in the OP. they can fine you up to $250k if you falsify info on your return and they catch you.


the IRS is known for making the tax code overly complex and trapping people for noncompliance. also, not to go off on too much of a tangent, but that general attitude towards taxation is up for debate. they use our tax money to bomb children, subsidize all sorts of horrible shit, etc.

Not really a trap but a way to stop you from trying to weasel your way out and not just because of one answer, think over a longer period of time.
You answer yes, yes, and then no and you have no profits to declare, what happened to all your coins? Somewhere two lines of code will flag you instantly for a cavity search. You had no coins for 10 years, you have no income and then you suddenly sold 100BTC, let's check this guy!

Of course, it will work as a reminder also for some and we all know that in most cases it's the fear of the consequences that drives people into paying taxes rather than their sense of civic duty or whatever you can call it.


And this doesn't stop thousands if not hundreds of thousands to try and do both on a regular basis 
Btw, is lying multiple times in a row to the IRS considered an aggravated form of perjury? Does it come with bonus time?

this depends on your perspespective

the entire concept of the nation state is predicated on whether the potential subjects/citizens agree to be governed, it's right there, written in the original philosophies of the modern nation state


if you don't feel that the state is fulfilling their side of the relationship, then you're more than entitled to opt out. What possible other way do people have to defend themselves against governments overstepping the line?

That's what they are trying to combat here. There are hundreds of thousands of people who don't declare everything they should on their tax returns, and bitcoin is no different. In previous years, the question was on the Schedule 1 part of the 1040 form rather than the standard 1040 form itself. You only have to complete a Schedule 1 if you have "Additional Income or Adjustments to Income", so presumably the IRS think people were either unaware of the requirements and not filing a Schedule 1 to declare their cryptocurrency activities, or were purposefully omitting a Schedule 1 if they had no other reason to file it so they could avoid answering the question.

By putting it at the top of the main 1040 form, everyone has to answer it, one way or another.

I don't see where is the trap for "the coming years". If you answer 'No', it's because you didn't buy/send/receive, if you reply 'Yes' it's because you did and so you know you have to report your capital gains. But you're supposed to already doing that by the way.
I believe the IRS tried to make the reporting easier and intuitive since it can be a pain in the ass just to fill the taxes paper.

Yes, there are only 2 answers (yes or no) but well what other answers could they give "I'm not sure Sir, maybe yes maybe no".
If taxpayers try to conceal cryptocurrency transactions they can't call this a trap because the IRS wants to make the rules fair for every citizen. They should report and pay the taxes coming with. Trying to cheat the IRS is not much different than cheating other citizens, including their friends and family.

I am afraid that the IRS might not stop on their own citizens and it might begin taxing foreign users of American exchanges.

Lawyers and legal experts. Is trading in an American exchange a taxable activity for people who do not reside in that country? I might have traded in an American exchange hehehe. I also reckon we should begin to educate all users about this.



The Internal Revenue Service (IRS) is making it harder for taxpayers to conceal cryptocurrency transactions — whether intentionally or not — by adding a new question about it near the top of the new Form 1040.

The form released last week asks: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” The only option is to mark yes or no.

If you answer inaccurately, you could find yourself in hot water with Uncle Sam who is rooting out tax evaders, tax professionals warned.

When you sign the form, it’s under the penalty of perjury,” said Ryan Losi, a certified public accountant and executive vice president of PIASCIK, a tax firm. “The IRS is just gathering the data, changing the forms to expressly say you did or didn’t, and setting the trap, so in the coming years, the hammer can come down.”

Read in full https://money.yahoo.com/irs-bitcoin-and-virtual-currency-tax-form-193503386.html