Topic: How does the IRS look at anonymous bitcoin? - page 3. (Read 748 times)

Not sure what you mean by 'anonymous Bitcoin' in the title.  If you mean UTXO's that went through Coin Joins and Mixers, it becomes easy to find who that particular person was when a mixed UTXO goes through a Centralized Exchange or a Custodial Wallet and the user behind the UTXO does not try to use tools available today like Tor, Virtual Machines and disposable SIM cards to hide tracks.

I can only imagine most of the average Coin Join and Chip Mixer users are not taking enough care of their 'anonymous' coins after 'anonymizing' them.  They forget there are IP traces, browser fingerprints, Centralized Exchanges that collect, sell and distribute data about you and so on.

I believe exchanges are working with authorities, more or less.  But even if they do not, if your money goes from your bank to Bitcoin on Binance and then you withdraw back to your bank account, they will know you made some Cryptocurrency moves without even having to deal with the Exchange you worked with.  I also tend not to believe that the routine IRS has is calling Exchanges to check every person's holdings or transactions, unless the person is under some sort of investigation.  There is probably a more automated process.  Otherwise, they would end up making hundreds of thousands or millions of calls.  There are of course non US Exchanges that may not agree the idea of sharing information with authorities of the United States, but that typically ends up badly for the Exchange so there are more that do agree than those that do not.

They have enough resources to find out more information about you or your transactions than you wish they could.  And if they have serious doubts about the legitimacy of your funds and transactions, there are even more resources they can dig through and use.  And unless you take extreme care of your online behavior, the chances of them finding at least a few bits of your moves enough to audit you are high.

Note that this is my personal take on this thing.  If you want them not to mess with your business, you have to be suspiciously careful.  Even if you pay taxes as a good citizen, when you want privacy you nowadays become suspicious.

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Regards,
PrivacyG

2nd question btw. Any idea how many people are buying/selling bitcoin and have not paid taxes? I've heard it's a lot but idk what percentage of the population. Like a lot of people I know who are into bitcoin didn't even know you had to pay taxes on trades. I, like them, thought it was only when you cashed out. I heard the IRS sent a crap ton of people letter reminding them of taxes.

Also, do exchanges like coinbase automatically hand over all your info to the IRS or do they only do it upon request? Like the IRS has to call them to ask for yours in particular?
What about exchanges like foreign exchanges like kraken or kucoin? I hear they are less likely to cooperate with the US gov? Idk. anyone have much info on that?