Topic: Bitcoin is "NOT" Legal Tender According to IRS (Read 5473 times)

Blockchain technology is still evolving because it has no boundaries, and later on it will  become more powerful because it is a fast and reliable still many will patronizing it in the future bitcoin and other crypto currency as well, as of this moment there's no other technologies that can compete, because of its characteristics which is anonymous anonymous and P2P in nature.

If that's the case,what's the future of blockchain ? The bitcoin blockchain technology is booming these days especially after emerging of big projects like NucleusVision, HostGames.

Probably it is a package deal...2% plus a free audit.

Ha. although I don't like a fee for paying taxes.

Considering the charges for going through coinbase or circle, though, you'd probably be better off just converting to USD and then paying yourself with a check or ACH.

http://pando.com/2014/01/15/pay-your-taxes-in-bitcoin-snapcard-launches-bill-pay-makes-the-irs-its-first-payee/

Apparently you can pay IRS taxes with bitcoin, through these folks, for a 2% surcharge.

Basically, paper money and coinage.  All "legal tender" means is that if one offers, that is, "tenders" it, to satisfy a debt, refusal to accept it effectively limits the right to try to collect it in court, as the creditor refused payment.  It does not mean that one must accept it for debts not yet incurred, i.e. someone can choose to refuse to sell you gasoline for cash and instead insist on payment by credit card.

QFT

Congress with often direct Federal Agencies (via law) to create a new rules (or more often, rules) regarding some specific issue that congress wants address. Congress does not direct the agency to make a rule go one way or another, but just to make a rule that achieves a broad public policy. The agency would then draft a rule, solicit public comments, and then potentially edit and repeat, or create a final rule which would have the same effect as law as congress has delegated this authority to them.

3 pages on this thread and only a couple half-way decent replies.  A meme was posted that claimed most people don't understand the financial system and this thread proves that:

-Legal Tender means places are required, by law, to accept Bitcoin.  This is incredibly unlikely and would be essentially a law forcing people to take Bitcoin.

-The IRS has no authority to declare anything to be legal tender.  Congress does that unless they delegate that authority to someone else like the IRS.

-The IRS has put an advisory opinion that Bitcoin transactions would generally be considered the bartering of property.  It does leave open the possibility that your specific situation may be different or that it may change in the future. This is perfectly valid advice for me at this time.  Last year I had many more transactions at exchanges than I did buying goods and services. 

-The IRS did not "declare" anything or create any new laws or orders, they simply gave advice based on their current rules.  Such a ruling in not binding other places or affect other definitions such as those by FinCEN or the Courts (Shavers and Silk Road).  There are phone numbers on the IRS notice and I have spoken with the women who is handling how digital currencies are reported and she is very helpful.  I had called her about the issue that the guidance was issued so late in tax season that it caused me to file an extension.  I had hired some local accountants and they screwed everything up so I ended using Tyson Cross.

The problem with income tax is that it is becoming increasing difficult to define exactly what is taxable income. Thus the super-efficient IRS and our magnificent tax laws. I find it amusing to watch an agency stuck in the 70's trying to figure out what exactly bitcoin is. Ditto for just about anyone else over 50. Meanwhile, the "true" measure of all wealth (that would be the dollar) continues to devalue. Hey IRS!

That's because while their minders don't trust them with their cash, they do trust them with our cards and account information.
Bitcoin could solve this trust problem for them easily enough.  The cashier doesn't need to know the private key, but can verify the transfer, and perform their function.

You can ignore them. Many US Federal buildings refuse USD and only take credit cards or personal checks.

Some US states also include gold and silver as Legal Tender.
https://statelegaltender.com/

I am not a fan of legal tender laws generally.

Legal tender is only for paying debts. Simply demand payment in bitcoins up front and refuse dollars. Then dollars will go away because there will be nowhere to spend them.

Ban is simply 100% tax if/when they seize it.

Finally Laissez-faire is helping out the people!!!

Legal tender law means that other people are forced to accept it.
Such laws are made for worthless unbacked paper currencies, that you would otherwise not want, but are forced by law to take.
If legal tender law were to apply to bitcoin, that would be an epic fail for bitcoin.  It should never need force to pay, it should be taken eagerly by those that understand it.

I believe the answer is Yes and Yes. You may choose to not report it, but you may also have to convince the seller to be your accomplice in breaking the law.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/FAQs-Regarding-Reporting-Cash-Payments-of-Over-10000-Form-8300

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Cash-Payments-Over-10000-Received-in-a-Trade-or-Business-Motor-Vehicle-Dealership-QAs

And if it comes out in an audit you may face fines, and penalties, as well as interest on the principal; perhaps even jail time. At that point capitol gains will seem small.

Because Bitcoin is decentralised, Fiat banking systems aren't.

so what role plays bitcoin here? 

Unfortunately people aren’t that smart nor do they really care. If they did we would've already had a revolution/rebellion.

I like this quote:

very obvious now. we need some kind of protection from tyrannical psychopaths and their blackmailing i would say. But let's wait and see and give them one last chance to make it right and apply same standards before we start rebellion. They may come up with another law after all in case their thinktanks get fed this forums information what i would think is the case.

Places like the US and UK like to give the impression that they're better and less corrupt than these nations, but they're not. They continually use these double standards whilst pretending to be morally superior and civilised.

then that is not a state that operates under the rule of law and therefore is a regime like in northkorea or like any african monarchy. They could abandon courts, congress and all at any second and make someone king for lifetime. Just around the corner ... when there is no law we can follow then there is also no tax we can pay to be honest

Courts operate logically?  I think governments regularly use double-standards.

but wait when in goes to court - will you also be able to claim it is both? that is called 'doublestandard' and it is outside of the rule of law since it is a breach in logic.

One thing that is  'x' and not 'y' can not be another thing 'y' and not 'x' at the same time.

This is the logic proof.  So either they decide it is x or y and stick to that or they can just abandon the rule of law. If they want to decide it is both x and y it needs to be x and y all the time

Maybe it's both and they might tax it as both. I'm sure they'll keep changing their stance on it to what's beneficial to them.

they said both - it is money and it is not money - they said it is an asset and it is not an asset.
So whenever they can tax it it will be what they need it to be in order for them to be able to tax it.
If they could tax it five times they would.

Perhaps some states will give Bitcoin significantly more recognition and adoption than others. I'm sure that's already happening though.

I found something: https://www.youtube.com/watch?v=fvqkQvOWgeo

Cannabis isn't legal in the United States. It's very much illegal at a federal level. SOME states have decriminalized it, inside their states, but that doesn't protect anyone from federal prosecution.

What is legal tender in the U.S.? To my knowledge only U.S. Dollars are legal tender. It should come as no surprise that bitcoin can't be used to pay taxes. 

Some used to say cannabis would never be legal in America and alcohol was once illegal.  So I wonder if things get bad enough or mass adoption becomes very popular there could be a paradigm shift.

Well I don't view the IRS and there taxes to be legal but still they exist and carry on so to each is own I say. 

Interesting. Best thing to do is just to buy things with the bitcoins and sell the goods you receive, after you have used the goods a little, of course

In the  U.S. more people are caught for tax evasion due to a friend/family member/neighbor ratting them out than any other reason because they are living above their apparent means then the IRS triggers an audit after receiving a report/tip/complaint. They CAN come to your house and ask you to show a receipt for everything in it as part of an audit or even without an audit, it was actually pretty common pre computers for 'the revenue man' to stop by houses and businesses and do inspections, you can even see it being made fun of in older tv shows. I'm blanking on what show it was but on one black & white show

And while the 4th amendment does allow you to say 'nope' they'll just go get a warrant and come back.

http://www.hmrc.gov.uk/cgt/

The IRS wants to have it's cake and eat it too.

"It's not money! ...err...  but we're going to have to ask you to give us some of that money, please."

What a joke. Our Congress legislates slower and slower, while technology moves faster and faster. They are hopeless. Doomed. Irrelevant. Obsolete.

This is going to end the same way the copywrong war ended. Individuals win, central authorities lose.

IRS and every other nation's fiat-money enforcement departments = Blockbuster Video = OBSOLETE

Tax evasion does largely go unnoticed as it's hard to spot if you're careful. That's why they always go down hard on celebs who get caught to send a message.

So if i withdrawl $10,000 cash worth of bitcoins is there anyway the IRS could tax it? would this be possible? lets say i wanted to spend most of it on a vehicle? new car?

I don't think they could have banned it, even if they had wanted to.

US is not Nazi Germany yet.

It'll be something that 99.9999% of the time, will go unnoticed.  Though if you're part of the 0.0001% that gets picked up through an exchange or by buying something with BTC, it's not going to be fun explaining to the government that you forgot to pay taxes.

Not sure. Think it's more than that. It's not really trackable, but if you sell the Bitcoins though an exchange they can track you that way.

it is better to be taxed than being banned

What is capital gains these days? I heard that it was something around £10k PA, but how is it even trackable? Is it one of those where it only matters if you take the piss with your capital gains?

Capital gains tax still applies though.

On a positive note UK scraps VAT on crypto trades: http://www.bbc.co.uk/news/business-26426550

You know, it really pisses me off that people are taxed on virtually every conventional financial transaction they do, and what is there to show for it? Some countries show for it better than others, but so much money is wasted away in extravagant wages for people who do a shoddy job.

Bitcoin to me is all about the protocol, the coins are like a share of that transmission power, kind of.

I doubt the US will ever recognise it as legal tender, but it's not going to stop them from trying to take their cut.

Let the IRS try and tax Bitcoin, fucking snubs.

It's time for a french revolution it seems, but are the people tired enough of being debt slaves to actually do anything? Probably not.

IRS won't consider Bitcoin a currency but will consider it a commodity so they can tax it!