Could cryptocurrency holders be attacked by IRS?

TagaMungkahi

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Quote from: morpheus305 on July 22, 2017, 08:54:54 PM

Quote from: sikke on April 18, 2017, 04:14:42 PM

If you are holding the cryptocurrency in any kind ,but you are not withdrawing it, or converting the crypto to fiat, then you are safe.
You cannot pay the tax from something that you haven't sold, but you just own.

Isn't that actually false? Don't you have to pay capital gains even on crypto to crypto gains?

The basis of capital gains is the money that You converted cryptocurrency into fiat which the Government has the right to geberate tax from it. Government doesn't have any right about cryptocurrency thing unless you convert it to fiat.

savushkinTA

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In March of 2014, the agency issued an "IRS Virtual Currency Guidance" detailing the tax requirements for cryptocurrencies.

morpheus305

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Quote from: sikke on April 18, 2017, 04:14:42 PM

If you are holding the cryptocurrency in any kind ,but you are not withdrawing it, or converting the crypto to fiat, then you are safe.
You cannot pay the tax from something that you haven't sold, but you just own.

Isn't that actually false? Don't you have to pay capital gains even on crypto to crypto gains?

Amph

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Quote from: LilibethSantos on May 23, 2017, 01:44:34 AM

If you want to be completely safe, don't ever involve bitcoin transactions with your real name or finances. Purchasing bitcoin with your credit card, Paypal, or bank account is just asking for red flags in the future.

i was asking myself lately about what they do when someone pay in bitcoin to buy something from another country, can they track something like that?

i'm fairly certain that the owner of that online shop, don't need to claim anything to the other country even if he sell item to people outside of his country...but i'm not sure

i think some traces are left behind in this case, and paying directly in bitcoin may not be all that safe from being taced back

LilibethSantos

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If you want to be completely safe, don't ever involve bitcoin transactions with your real name or finances. Purchasing bitcoin with your credit card, Paypal, or bank account is just asking for red flags in the future.

Qartersa

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Quote from: PovertyByte on March 27, 2017, 02:28:59 AM

I am wondering. Could laws change and eventually the IRS and whatever agency combined might go and scour all the blockchains and try to tax the shit out of everybody they presume to be holding cryptocurrency?

Privacy based coins that actually work would be safe but what about BTC its self without the use of those mixing services, current ETH, and XEM for example that has no intentions for privacy at all?

I think it is possible for Bitcoin holders or investors to be investigated and even attacked by the IRS especially if there is a leakage in the system. The government has all in its power to regulate all those who earn money, even those done online. All the government has to do is to create online measures to effectively regulate online business transactions. This move may cost much to the government but it will definitely help ensure correct collection and/or remittance of tax.

vapourminer

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what is this "brake pedal" you speak of?

Quote from: etherparty on March 29, 2017, 12:57:49 AM

If you earn BTC or any other altcoin because of work, mining, speculation on exchanges, etc you have to declare it as any other income.
If you don't do that sooner or later you may get caught, simple.

this.

just pay your taxes when you exchange to fiat (assuming you profit, not lose) and relax.

ps im in the usa, other countries may differ.

ethersphere

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It's definitely much easier to evade taxes and fake profit streams using cryptos though. I doubt its easy to trace where the money came from unless you sell and withdraw it all in one go from one bank account.

European Central Bank

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i went into crypto with the expectation of paying taxes if there was a huge profit. same as anything else. anyone who thinks it's a miracle tax free product is an asshole who deserves everything they get.

Agrello

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The great thing about cryptocurrencies is that it can be stored on a usb, in your mind (remembering your passphrase) or other places - imagination is your limit so to say. Would also depend on why they would attack it? The most beautiful part if all is that you can just move countries. Businesses who are involved can and have moved to other countries that are more friendly. It is the first time we have been able to do such a thing which has shown some nations that they cannot be oppose the idea and movement, else they will loose greater capital by people leaving the nation.

sikke

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That actually depends on the thing you have done.
If you are holding the cryptocurrency in any kind ,but you are not withdrawing it, or converting the crypto to fiat, then you are safe.
You cannot pay the tax from something that you haven't sold, but you just own.

In the same moment when you exchange the btc ( for example ) to USD, you are obligated to pay the income tax for that transaction.
If you won't do this, then there is a possibility of IRS raid on your house, to investigate what have you done.

RodeoX

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The revolution will be monetized!

P.S. The IRS is not "attacking" anyone. They are going after deadbeats who want you to pay their share of the bill.

iamTom123

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Of course, this is quite possible and in fact IRS is doing it now against Coinbase as it wants to get hold of data for American citizens who made Bitcoin transactions and made some profits subject for tax. The government can get so creative and what they can't be creative of they can just ask for changing some laws. The power of the government will always be there and in many cases there is nothing we can do but to really abide by the established rules and regulations. Fighting the government can sometimes be a lost case especially for ordinary guys like me.

nu11p7r

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Quote from: iamTom123 on April 02, 2017, 01:57:50 AM

The government thru any agency just like the IRS can get too creative to find ways to have some share of what we are earning. Tax evasion can be a serious charge and if we are earning some money via Bitcoin and we don't declare it then the government can act on that. This is exactly what the IRS is doing against Coinbase as IRS is demanding to have an access to the company's database to see those Americans who have never declared their Bitcoin.

No matter how we may proclaim that Bitcoin is anonymous and it is beyond the control of the government, the reality and truth is that the government can find a way most especially on taxing us. And making enemy with the government can be a terrifying thing. :(

The question everybody should really be asking is not "Could" but "When" will holders be attacked by the IRS and governments in general.

I would argue the reality is that Bitcoin is not yet but instead on the verge of being beyond the control of any government.

The last sentence of iamTom123's post - "making enemy with the government can be a terrifying thing" is the cause of most participants and observers denial of reality.

Bitcoin is in a natural state of war with the government because it is a competitor in the supply of money, a business/enterprise/function which is critical to the very nature of the modern nation-state concept. Currently governments consider it to be too trivial and more about a technological idea that can be subverted or hi-jacked for their own purposes and so they are likely not yet exerting significant resources in covert or overt ways to attack. But as it grows the nation state stance is likely to change suddenly.

I believe the answer to "when" is somewhere around another 10x higher price / market cap jump for bitcoin and crypto in general. Best to prepare now for an eventual conflict instead of being scared about it. Otherwise don't get involved in bitcoin.

Amph

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Quote from: Qartada on April 02, 2017, 05:07:58 AM

Quote from: iamTom123 on April 02, 2017, 01:57:50 AM

The government thru any agency just like the IRS can get too creative to find ways to have some share of what we are earning. Tax evasion can be a serious charge and if we are earning some money via Bitcoin and we don't declare it then the government can act on that. This is exactly what the IRS is doing against Coinbase as IRS is demanding to have an access to the company's database to see those Americans who have never declared their Bitcoin.

No matter how we may proclaim that Bitcoin is anonymous and it is beyond the control of the government, the reality and truth is that the government can find a way most especially on taxing us. And making enemy with the government can be a terrifying thing. Sad

Even if the transactions of Bitcoin were anonymous, what they would want to be taxing are the conversions to fiat currency as that's what governments control and deal with. Generally there are successful if it's into digital fiat currency (e.g. into a bank), and maybe it'll become harder if cash becomes less common due to the introduction of (perceived) improvements in banking systems.

i heard here that they want to tax directly bitcoin eventually, because bitconi can already be used as a currency and those are using it like this can in thoery avoid taxation

to do this they said that they would track the transaction that go to some of the shops that accept bitcoin as a payment

i'm not entirely sure if this si true, but if they don't want people to evade taxing only when dumping for fiat is not enough...

Qartada

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Quote from: iamTom123 on April 02, 2017, 01:57:50 AM

The government thru any agency just like the IRS can get too creative to find ways to have some share of what we are earning. Tax evasion can be a serious charge and if we are earning some money via Bitcoin and we don't declare it then the government can act on that. This is exactly what the IRS is doing against Coinbase as IRS is demanding to have an access to the company's database to see those Americans who have never declared their Bitcoin.

No matter how we may proclaim that Bitcoin is anonymous and it is beyond the control of the government, the reality and truth is that the government can find a way most especially on taxing us. And making enemy with the government can be a terrifying thing. Sad

Even if the transactions of Bitcoin were anonymous, what they would want to be taxing are the conversions to fiat currency as that's what governments control and deal with. Generally there are successful if it's into digital fiat currency (e.g. into a bank), and maybe it'll become harder if cash becomes less common due to the introduction of (perceived) improvements in banking systems.

iamTom123

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The government thru any agency just like the IRS can get too creative to find ways to have some share of what we are earning. Tax evasion can be a serious charge and if we are earning some money via Bitcoin and we don't declare it then the government can act on that. This is exactly what the IRS is doing against Coinbase as IRS is demanding to have an access to the company's database to see those Americans who have never declared their Bitcoin.

No matter how we may proclaim that Bitcoin is anonymous and it is beyond the control of the government, the reality and truth is that the government can find a way most especially on taxing us. And making enemy with the government can be a terrifying thing. Sad

audaciousbeing

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Quote from: PovertyByte on March 27, 2017, 02:28:59 AM

I am wondering. Could laws change and eventually the IRS and whatever agency combined might go and scour all the blockchains and try to tax the shit out of everybody they presume to be holding cryptocurrency?

Privacy based coins that actually work would be safe but what about BTC its self without the use of those mixing services, current ETH, and XEM for example that has no intentions for privacy at all?

IRS will be performing its responsibility in generating revenue for the government and the moment they find it difficult to block every loop hope of revenue evasion from citizens, then they are nearing either extinction or re-organization. So if cryptocurrency will open that room of tax evasion then I see IRS declaring massive war against users and even tax you arbitrarily up to the level that you will be the one to open up on all your sources in other to reduce the tax liability.

RodeoX

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The revolution will be monetized!

Quote from: hilariousandco on March 27, 2017, 05:05:15 AM

Quote from: PovertyByte on March 27, 2017, 02:28:59 AM

I am wondering. Could laws change and eventually the IRS and whatever agency combined might go and scour all the blockchains and try to tax the shit out of everybody they presume to be holding cryptocurrency?

Privacy based coins that actually work would be safe but what about BTC its self without the use of those mixing services, current ETH, and XEM for example that has no intentions for privacy at all?

Why would laws need to change? If you're not paying taxes on what you should legally owe then they can come after you in any which way they can. ...

Totally. You could be jailed right now for tax evasion. The IRS goes after tax cheats. Pay your taxes and you have no legal problems. Of course it's true that laws could change and those laws could be anything you fail to fight against.

olubams

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Quote from: PovertyByte on March 27, 2017, 02:28:59 AM

I am wondering. Could laws change and eventually the IRS and whatever agency combined might go anregulatedhe blockchains and try to tax the shit out of everybody they presume to be holding cryptocurrency?

Privacy based coins that actually work would be safe but what about BTC its self without the use of those mixing services, current ETH, and XEM for example that has no intentions for privacy at all?

The answer to that will be a perfect yes because as a government revenue genenating agency their motive is to get whatever to the maximum from you if you allow them and if bitcoin is regulated and laws enacted for that purpose, I am sure they will come after any individual generating income from that end...

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