IRS Criminal Investigation Unit Is Taking on More Crypto Tax Cases

larry_vw_1955

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Quote from: tread93 on January 12, 2024, 01:09:02 AM

Interesting I never knew the actual term for this I just often thought of this as a strategy that money launderers used for obvious reasons.

there's different types of money laundering. structuring is just one of them. you could open up a "cash intensive" business and launder your money through that. but that's alot more trouble than just splitting your money up into $9000 chunks and hoping the bank doesn't notice.

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If you look at this new article I posted this report filing with the SEC it sounds like the same one is being implemented for crypto, not just cash transactions: https://bitcointalksearch.org/topic/new-crypto-tax-law-in-us-10k-transactions-must-report-to-irs-in-15-days-5480307

yeah nice find there. from one of your linked articles: https://dailycoin.com/new-irs-crypto-law-targets-traders-with-ambiguous-tax/

Taxpayers must report identity details of the party sending them over $10,000 worth of cryptocurrency. This includes the name, physical address, social security number, transaction amount, and nature of the transaction.

As though it's not hard enough to get someone to send you $10,000 in bitcoin, now you have to collect all their personal info including Social. Who wants to give out their social security number to someone they are sending money to? Couldn't that be used to steal their identity or does the IRS even care about that?

The new rule applies to individual crypto holders and businesses dealing with digital currencies. It mandates reporting sender information even if the party’s identity information is unknown or the transaction context does not allow identity information collection. A failure to meet the reporting requirement gives way to potential felony charges for non-compliance.

A felony is a pretty big deal. Because someone that got caught up in that dragnet will probably be fully audited as well. By the IRS no doubt.

Did you see this story?
IRS Delays Requiring Users of Venmo And Other Payment Apps To Report Transactions Over $600
https://www.forbes.com/advisor/taxes/cash-apps-to-report-payments-of-600-or-more/

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Under current law, the IRS requires payment apps, known formally as “third-party settlement organizations,” to issue Form 1099-K to report when certain payment transactions meet both these criteria:

Gross payments exceed $20,000
More than 200 transactions are completed within the year

The new law will eventually require users to receive Form 1099-K for any payments of goods and services over $600, regardless of the number of transactions. That means more people will receive the forms.

I think right now they have the limit set at $5000. Anything more than that, they have to tell the IRS about what you been up to.

The operator of the Zelle payment platform, Early Warning Services, said in an email statement that Zelle doesn’t settle funds but rather provides messaging between a financial institution and people making the payments. So the company said Zelle will not be subject to the new law.

That sounds like a loophole but everyone is going to want to get paid by zelle so they can avoid getting a 1099-K report filed on them. Shocked

tread93

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Quote from: larry_vw_1955 on January 04, 2024, 12:14:42 AM

Quote from: philipma1957 on January 03, 2024, 10:44:05 PM

The mine will earn enough in JAN 2024 that I will need to do two or three sends to avoid the rule.

if there are four 4️⃣ of us and I earn 30k in a month I will need to pull the coins out when they get to 9k

i wouldn't do that because they'll think you're trying to launder money:

https://www.idenfy.com/blog/structuring-in-money-laundering/

What is Structuring?
Structuring in money laundering is when criminals make transactions intentionally splitting larger amounts into a series of smaller sums to avoid scrutiny from law enforcement or compliance obligations. In other words, criminals strategically structure deposits just under the threshold to prevent unwanted attention.

In these cases, the individual or entity typically conducts smaller transactions without requiring the financial institution to file a report with a government agency. For instance, in the United States, a report must be submitted for all cash transactions exceeding $10,000 processed by a financial institution.

Quote

this is 3 or 4 times a month.

I will need to send the coins right away so they do not go to 10k.

more fees for sure.

Is Structuring a Crime?
Even if the person obtained the funds for structuring legally, structuring is still illegal and is considered a criminal offense.

That would be a good way to turn a legitimate business into a illegitimate one it seems like Shocked

Interesting I never knew the actual term for this I just often thought of this as a strategy that money launderers used for obvious reasons. If you look at this new article I posted this report filing with the SEC it sounds like the same one is being implemented for crypto, not just cash transactions: https://bitcointalksearch.org/topic/new-crypto-tax-law-in-us-10k-transactions-must-report-to-irs-in-15-days-5480307

larry_vw_1955

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Quote from: philipma1957 on January 08, 2024, 09:40:51 PM

Mining is not illegal and I can simply show that other pools such as mmpool and nicehash collapsed and did not pay and or held my coins for years. Thus I simply take the coins out more quickly perfectly legal. At no point last year did I ever let coins stay to 10 k and then pull them out so I am not changing my behavior as I result of the new law.

The highest amount I allowed to stay in my biggest pool at any time in the last year was under 5k.

keep it under 5k sounds like a plan especially since the government raised the tax reporting minimum from $600 to $5000 apparently.

https://www.foxbusiness.com/money/irs-delays-tax-reporting-rule-venmo-paypal-payments-600

Instead, the IRS will treat 2023 as "an additional transition year," meaning that payment apps will not be required to send users Form 1099-K unless their gross income exceeded $20,000 or they had 200 separate transactions within a calendar year. Beginning in 2024, that basic reporting threshold will be increased from $600 to $5,000.

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I also have been doing kyc and paying my tax for years.

you know more about how to handle the money end of mining than me so it seems like you know what you're doing!

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My biggest issue would be if I choose to solo mine and hit a block as that would be receiving more than 10k and I am not sure how to report it.

report it as a lottery winning because the chances of that would be low i would think unless you have a massive operation Shocked

philipma1957

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Quote from: larry_vw_1955 on January 04, 2024, 12:14:42 AM

Quote from: philipma1957 on January 03, 2024, 10:44:05 PM

The mine will earn enough in JAN 2024 that I will need to do two or three sends to avoid the rule.

if there are four 4️⃣ of us and I earn 30k in a month I will need to pull the coins out when they get to 9k

i wouldn't do that because they'll think you're trying to launder money:

https://www.idenfy.com/blog/structuring-in-money-laundering/

What is Structuring?
Structuring in money laundering is when criminals make transactions intentionally splitting larger amounts into a series of smaller sums to avoid scrutiny from law enforcement or compliance obligations. In other words, criminals strategically structure deposits just under the threshold to prevent unwanted attention.

In these cases, the individual or entity typically conducts smaller transactions without requiring the financial institution to file a report with a government agency. For instance, in the United States, a report must be submitted for all cash transactions exceeding $10,000 processed by a financial institution.

Quote

this is 3 or 4 times a month.

I will need to send the coins right away so they do not go to 10k.

more fees for sure.

Is Structuring a Crime?
Even if the person obtained the funds for structuring legally, structuring is still illegal and is considered a criminal offense.

That would be a good way to turn a legitimate business into a illegitimate one it seems like Shocked

Mining is not illegal and I can simply show that other pools such as mmpool and nicehash collapsed and did not pay and or held my coins for years. Thus I simply take the coins out more quickly perfectly legal. At no point last year did I ever let coins stay to 10 k and then pull them out so I am not changing my behavior as I result of the new law.

The highest amount I allowed to stay in my biggest pool at any time in the last year was under 5k.

I also have been doing kyc and paying my tax for years.

My biggest issue would be if I choose to solo mine and hit a block as that would be receiving more than 10k and I am not sure how to report it.

zasad@

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I understand from the point of view of the legislation of my country, but these payments cannot be structuring if this share belongs to a business partner. It turns out that his business partner must declare these bitcoins and pay taxes. But such agreements must be legalized. Of course, the best thing to say is a tax consultant, but if taxes are paid, then there is no crime here.

larry_vw_1955

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Quote from: philipma1957 on January 03, 2024, 10:44:05 PM

The mine will earn enough in JAN 2024 that I will need to do two or three sends to avoid the rule.

if there are four 4️⃣ of us and I earn 30k in a month I will need to pull the coins out when they get to 9k

i wouldn't do that because they'll think you're trying to launder money:

https://www.idenfy.com/blog/structuring-in-money-laundering/

What is Structuring?
Structuring in money laundering is when criminals make transactions intentionally splitting larger amounts into a series of smaller sums to avoid scrutiny from law enforcement or compliance obligations. In other words, criminals strategically structure deposits just under the threshold to prevent unwanted attention.

In these cases, the individual or entity typically conducts smaller transactions without requiring the financial institution to file a report with a government agency. For instance, in the United States, a report must be submitted for all cash transactions exceeding $10,000 processed by a financial institution.

Quote

this is 3 or 4 times a month.

I will need to send the coins right away so they do not go to 10k.

more fees for sure.

Is Structuring a Crime?
Even if the person obtained the funds for structuring legally, structuring is still illegal and is considered a criminal offense.

That would be a good way to turn a legitimate business into a illegitimate one it seems like Shocked

philipma1957

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Quote from: tread93 on January 03, 2024, 05:49:03 PM

This doesn't suprise me at all. As BTC becomes more prevalent we should expect that the IRS is more strict w/ where all that money is moving and its in their nature to try and control it. Just look at the new regulations that they are putting in place to help them do just that. I am curious to see how everyone reacts to the new regulation and to see how they expect to enforce them.

The mine will earn enough in JAN 2024 that I will need to do two or three sends to avoid the rule.

if there are four 4️⃣ of us and I earn 30k in a month I will need to pull the coins out when they get to 9k

this is 3 or 4 times a month.

I will need to send the coins right away so they do not go to 10k.

more fees for sure.

tread93

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This doesn't suprise me at all. As BTC becomes more prevalent we should expect that the IRS is more strict w/ where all that money is moving and its in their nature to try and control it. Just look at the new regulations that they are putting in place to help them do just that. I am curious to see how everyone reacts to the new regulation and to see how they expect to enforce them.

Husires

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IRS has found a jar of gold. All traders and exchanges are afraid to take any action against the IRS’s decisions because it is easy to claim that these people are laundering money. exchanges have also tried to cooperate with governments and official bodies, they will try to earn more of this hot money, either by expanding taxes and ensuring That more than 90% of those who have Bitcoin are subject to taxes or by closing any service that does not cooperate or enhances customer privacy.

philipma1957

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Quote from: PrivacyG on December 16, 2023, 05:46:38 PM

Quote from: Lucius on December 11, 2023, 07:44:17 AM

However, I would not agree that moving from the US is a solution, unless a person renounces his citizenship and obtains it in another country - if I am not mistaken, US citizens are still obliged to pay taxes in the US even if they live elsewhere.

Changing countries is only a solution if you have enough money to make it worth the effort and are renouncing your citizenship and obtain it in a country that can not have you extradited to your first country. But even then there are consequences. You can not see your family any more. You can not see your country any more. And much more.

Hiding from taxes in a suspicious way only leads to more problems.

Quote from: Lucius on December 11, 2023, 07:44:17 AM

In any case, paying taxes is something that almost cannot be avoided, but some countries have very favorable laws when it comes to taxes on cryptocurrencies, so they have 0% tax if you sell the cryptocurrency 1 or 2 years after the purchase, which is for many something they can only dream about.

True words you wrote. But now you make me wonder. Even if some body was from US and moved to Germany. Do they have to pay taxes in United States if they started working in Germany as a bartender? Would that not mean double taxation?

Maybe a better approach is finding a way to do your Cryptocurrency business in a more tax friendly country. I wonder if then you would still need to pay your tax in the States.

The States are weird in this regard anyway. They seem so annoyingly territorial and dominant up to a point where you completely avoid the idea of ever getting citizenship over there. The land of freedom, they say?

if you remain a USA citizen and live abroad you are obliged to file a return to the USA 🇺🇸 federal government. I.R.S.

only USA and a small third world country do this.

Now USA and germany 🇩🇪 have a tax treaty so you pay the german tax and get a credit on the usa return.

been there done that.

The usa and tax is pretty much totally fucked up. 🆙

PrivacyG

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Crypto Swap Exchange

Quote from: Lucius on December 11, 2023, 07:44:17 AM

However, I would not agree that moving from the US is a solution, unless a person renounces his citizenship and obtains it in another country - if I am not mistaken, US citizens are still obliged to pay taxes in the US even if they live elsewhere.

Changing countries is only a solution if you have enough money to make it worth the effort and are renouncing your citizenship and obtain it in a country that can not have you extradited to your first country. But even then there are consequences. You can not see your family any more. You can not see your country any more. And much more.

Hiding from taxes in a suspicious way only leads to more problems.

Quote from: Lucius on December 11, 2023, 07:44:17 AM

In any case, paying taxes is something that almost cannot be avoided, but some countries have very favorable laws when it comes to taxes on cryptocurrencies, so they have 0% tax if you sell the cryptocurrency 1 or 2 years after the purchase, which is for many something they can only dream about.

True words you wrote. But now you make me wonder. Even if some body was from US and moved to Germany. Do they have to pay taxes in United States if they started working in Germany as a bartender? Would that not mean double taxation?

Maybe a better approach is finding a way to do your Cryptocurrency business in a more tax friendly country. I wonder if then you would still need to pay your tax in the States.

The States are weird in this regard anyway. They seem so annoyingly territorial and dominant up to a point where you completely avoid the idea of ever getting citizenship over there. The land of freedom, they say?

Lucius

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@larry_vw_1955, it would be El Salvador, but I think they still overcharged the price for what they offer. I think that the comments on that "offer" are quite negative, because most say that they would spend $1 million in a much better way, which is a completely logical choice. In addition, the guys from the Tether team and the Bukele team made an agreement a long time ago -> El Salvador Bitcoin: Tether buys itself a country; and why Chivo sucks

Regarding taxes, I would disagree that the average American wants to play cat and mouse with the IRS, because I believe that most are guided by that old saying "the two things everyone has to do in life are pay taxes and die".

larry_vw_1955

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Quote from: Lucius on December 11, 2023, 07:44:17 AM

However, I would not agree that moving from the US is a solution, unless a person renounces his citizenship and obtains it in another country

I had read about Tether and some country teaming up and offering some type of Bitcoin VISA citizenship deal. The requirement was the person had to invest $1,000,000 into that country. So unless you're a millionaire, don't even think about becoming a citizen of another country. They don't want you unless you have alot of cash.

Quote

- if I am not mistaken, US citizens are still obliged to pay taxes in the US even if they live elsewhere.

that's true. but i bet alot of them don't. they just file fake returns. or none at all.

Lucius

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Quote from: Fiatless on December 10, 2023, 11:14:54 AM

Some people are in the cryptocurrency system because it is tax friendly. Many of them will be discouraged to join or continue in the crypto sector if the government that making and enforcing strict tax policies. The government of the US message is clear: " Be regulated or move out of the US".

There are a lot of misconceptions when it comes to cryptocurrencies, and one of them is certainly that by investing in them you can avoid paying taxes - which is somewhat true if you know how to stay under the radar, but if you use CEX with KYC, then it's only a matter of time before the authorities can request this information. The US has always had a very strict tax system, and some of the biggest criminals in the past have been convicted and sent to prison precisely because of the IRS.

However, I would not agree that moving from the US is a solution, unless a person renounces his citizenship and obtains it in another country - if I am not mistaken, US citizens are still obliged to pay taxes in the US even if they live elsewhere.

In any case, paying taxes is something that almost cannot be avoided, but some countries have very favorable laws when it comes to taxes on cryptocurrencies, so they have 0% tax if you sell the cryptocurrency 1 or 2 years after the purchase, which is for many something they can only dream about.

zasad@

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Quote from: Fiatless on December 10, 2023, 11:14:54 AM

Quote from: zasad@ on December 09, 2023, 09:19:40 AM

I could name you dozens of verified money changers who privately exchange cryptocurrencies for fiat around the world. But I don't want to do advertising. I am sure that tax authorities receive data only from custodial services. In other cases, searching for data is very expensive.

It will only take time before the government will fish out these private or secretly run exchanges. The government will just recruit many undercover personnel that will pretend that they want to deal with these exchanges. They will end up discovering and shutting them down or forcing them to remit taxes. We had a case in my location where a law enforcement agent pretended to that he wanted to exchange his coins and they ended arresting the local exchange operator.

And what changed after that?
Now all exchangers are closed?
There are many other ways to exchange cryptocurrencies for fiat without meeting in person. In Russia, they send a courier with fiat after the transfer of cryptocurrency. You can withdraw money from a partner store after you use the code word.

Fiatless

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Quote from: Poker Player on December 09, 2023, 01:22:25 AM

It is not that, with the regulations what they want is to control the cryptocurrency market in the same way they control the stock and mutual fund market. I don't think that will push back many people, just the people who were operating under the table will have to look for new ways (the scarce ones) or declare everything.

Some people are in the cryptocurrency system because it is tax friendly. Many of them will be discouraged to join or continue in the crypto sector if the government that making and enforcing strict tax policies. The government of the US message is clear: " Be regulated or move out of the US".

Quote from: zasad@ on December 09, 2023, 09:19:40 AM

I could name you dozens of verified money changers who privately exchange cryptocurrencies for fiat around the world. But I don't want to do advertising. I am sure that tax authorities receive data only from custodial services. In other cases, searching for data is very expensive.

It will only take time before the government will fish out these private or secretly run exchanges. The government will just recruit many undercover personnel that will pretend that they want to deal with these exchanges. They will end up discovering and shutting them down or forcing them to remit taxes. We had a case in my location where a law enforcement agent pretended to that he wanted to exchange his coins and they ended arresting the local exchange operator.

zasad@

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Quote from: tech30338 on December 09, 2023, 01:29:31 AM

Quote from: zasad@ on December 06, 2023, 12:16:36 PM

https://www.bloomberg.com/news/articles/2023-12-04/irs-criminal-investigation-unit-taking-on-more-crypto-tax-cases
"Head of division says half of active crypto cases involve tax
Money laundering was top issue three years ago, Lee says

The Internal Revenue Service crime unit that played a leading role in the Binance Holdings Ltd. probe is seeing a surge in cases involving crypto-related tax evasion, according to the division’s leader.

Three years ago, the vast majority of the active crypto investigations — upwards of 90% — involved money laundering, Jim Lee, chief of the IRS’s criminal investigation division, told reporters on a call Monday. But in the past year, about half of the digital-asset probes have involved tax, he said."

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Don’t swear that the link is from Bloomberg, but it’s true. The US authorities cannot accept that they cannot control cryptocurrencies

Seems like when they are not taking control of the industry the best way is to chase them through taxes, they could have taken down those tax evaders in the first year, it's not about the tax it's about the control.

I could name you dozens of verified money changers who privately exchange cryptocurrencies for fiat around the world. But I don't want to do advertising. I am sure that tax authorities receive data only from custodial services. In other cases, searching for data is very expensive.

tech30338

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Quote from: zasad@ on December 06, 2023, 12:16:36 PM

https://www.bloomberg.com/news/articles/2023-12-04/irs-criminal-investigation-unit-taking-on-more-crypto-tax-cases
"Head of division says half of active crypto cases involve tax
Money laundering was top issue three years ago, Lee says

The Internal Revenue Service crime unit that played a leading role in the Binance Holdings Ltd. probe is seeing a surge in cases involving crypto-related tax evasion, according to the division’s leader.

Three years ago, the vast majority of the active crypto investigations — upwards of 90% — involved money laundering, Jim Lee, chief of the IRS’s criminal investigation division, told reporters on a call Monday. But in the past year, about half of the digital-asset probes have involved tax, he said."

___
Don’t swear that the link is from Bloomberg, but it’s true. The US authorities cannot accept that they cannot control cryptocurrencies

Seems like when they are not taking control of the industry the best way is to chase them through taxes, they could have taken down those tax evaders in the first year, it's not about the tax it's about the control.

Poker Player

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Quote from: avikz on December 06, 2023, 12:34:47 PM

As a gameplan, they have now started disturbing common people with regulatory hassles. Now if a common person is constantly pushed with legal things, they will get fed-up and probably turn away from crypto totally. That's what IRS wants it seems!

It is not that, with the regulations what they want is to control the cryptocurrency market in the same way they control the stock and mutual fund market. I don't think that will push back many people, just the people who were operating under the table will have to look for new ways (the scarce ones) or declare everything.

zasad@

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Quote from: avikz on December 06, 2023, 12:34:47 PM

Is it surprising? I guess not! US government is leaving no stones unturned to stop crypto adoption. As a gameplan, they have now started disturbing common people with regulatory hassles. Now if a common person is constantly pushed with legal things, they will get fed-up and probably turn away from crypto totally. That's what IRS wants it seems!

US can't control cryptocurrency. But they can indeed control their citizens. They started with cryptos and now shifted focus towards exchanges and citizens. Sad!

The US cannot stop the introduction of cryptocurrency, otherwise they would shut down Coinbase. The US authorities want everything to be according to their rules and citizens to use only the "right" exchanges and blockchains. And all other companies that were unable to lobby for their interests will be thrown out of the US market.

avikz

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Is it surprising? I guess not! US government is leaving no stones unturned to stop crypto adoption. As a gameplan, they have now started disturbing common people with regulatory hassles. Now if a common person is constantly pushed with legal things, they will get fed-up and probably turn away from crypto totally. That's what IRS wants it seems!

US can't control cryptocurrency. But they can indeed control their citizens. They started with cryptos and now shifted focus towards exchanges and citizens. Sad!

zasad@

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https://www.bloomberg.com/news/articles/2023-12-04/irs-criminal-investigation-unit-taking-on-more-crypto-tax-cases
"Head of division says half of active crypto cases involve tax
Money laundering was top issue three years ago, Lee says

The Internal Revenue Service crime unit that played a leading role in the Binance Holdings Ltd. probe is seeing a surge in cases involving crypto-related tax evasion, according to the division’s leader.

Three years ago, the vast majority of the active crypto investigations — upwards of 90% — involved money laundering, Jim Lee, chief of the IRS’s criminal investigation division, told reporters on a call Monday. But in the past year, about half of the digital-asset probes have involved tax, he said."

___
Don’t swear that the link is from Bloomberg, but it’s true. The US authorities cannot accept that they cannot control cryptocurrencies

Topic: IRS Criminal Investigation Unit Is Taking on More Crypto Tax Cases (Read 304 times)