Topic: IRS says we are are criminals now (Read 2846 times)

It probably will not end up in courts, it will likely be more of a political battle.

The IRS will likely go after "big fish" that they think are cheating the system.

Definitely can expect this to be tied up in the courts for years.  (And realistically, the IRS is stretched fairly thin as is....trying to enforce this would be quite difficult.)

The IRS is going to have a very difficult time enforcing capital gains on BTC, especially with relatively small users.

IMO they will likely focus their attention on people who have made a lot of money with BTC and are buying things like cars and houses with BTC, but their "day job" income would not support these purchases.

This was a rudimentary set of laws created by senile old men and women who still use rotary phones without touch tone and have a cassette tape answering machine.

You can't borrow a set of laws from Gold because it's NOT gold nor property and was never created to be as such.  That was just sheer laziness, seriously.  So, I'll be lazy and not report then.  Government is supposed to set an example for the population and if they're lazy, they can't blame their population from being lazy too, it's the lazy lieberal way.

I don't live in the US but if I did, I wouldn't report it, get it done right, THEN, I'll report it.  That's why there's no laws in Canada, I told them if they didn't get it right I wouldn't pay anyways.  Or I'd report the currency from every video game that I play, anywhere from Drebin Points to C&C Funds.  Yeah, makes no sense to report video game money, so I don't report it especially if I don't cash out.

Essentially, governments can put any laws they want but if people refuse to follow them and police refuse to enforce them, they system worked.  I also read somewhere that Poland was taxing miners 28%...  THAT is ridiculous and I would be willing to bet no one reports their earnings too.

If you never filed taxes, they'd likely never know you exist.

However, the last ditch effort would be to open a company overseas and claim you rent your home to a foreign mining corporation, this way you only get taxed on rent and not Bitcoin income. 

-The government rulebook is purposely left open for exploitation.  They pray you don't find out.

Well from what i understand congress (hearings the summer of 2013) treasury SEC were/are somewhat 'miffed' with the land analogy that the IRS used for guidelines....but being an election year likely nothing will get done till after Nov or prob spring of 2015..up to that point ..it was just pay taxes on coin you use on capital gains more or less ..and being USA it is the tax payers responsibility to be honest on such..ie like stocks and bonds..your risk to buy....sell capital gains (or tax credit for capital loss) ..don't sell at all ...don't have to do any tax.

with congress and the above wanting btc to be treated like a modified currency..well the IRS guidelines thru that out the window imho
and imho came out of left field as far as the congress hearings were concerned...if we did not have such a 'dysfunctional congress" these days it likely would have been addressed already ..alas that an't gonna  happen soon in my view.

also seems to me some back room clout by ..dare i say....interests who wanted to 'stifle' bitcoin? I mean 20 days before USA persons taxes are due you are to report ALL btc you own and pay taxes on it before taxes due...i mean really....keep track and document every btc transaction you have ever done and do capital gains on it ..jeez

so again i suspect it will 'evolve' back to you buy equip it is your risk (no more deductions .) er maybe ..just thought them giant PH farms may have enough clout to keep that in..hmmmm...anyway and if you 'spend the coin" like 'selling a stock" you pay capital gains..which again is up to the individual to keep track of or suffer consequences with IRS etc

this whole land/keep track of each bitcoin capital gain you ever made etc etc will all go away imho

but again only giant PH farms by 2015 anyway imho...and again I have a hard time believing the IRS is gonna let such farms 'mine' btc (ie $$$) out of 'air' and not tax them 25% of gross income.....that would be the line I think the IRS will not cross..thus mining will go overseas to say Belize? Denmark? where they would want the $$$ to flow in country and be a bitcoin hub again imho

hmmm.....looking at above PH farms etc...maybe they will keep equip deductions too....not sure how that will work out ..

anyway home mining for btc at least if you look at difficulty vs what you can get for btc vs just buying btc is prob dead

moving on to alt coins (have to make my nut for the IRS don't ya know heh) me always being the tail end of the dog
that will also go 'odd' as soon as I touch an alt miner (its a gift)

anyway what do I know I sure did not see the current IRS guidelines (the weird parts stated above) pop'ing up 20 days before Tax day...

who knows?

Searing

(just my 'hopeful' guesses?)

Although it's obvious quite a few people will be ignoring this and continuing on paying for things in btc and not giving it a second thought, this does pose a problem for quite a few people who plan to do it the legal way. What needs to happen is a wallet that fully integrates the IRS guidelines and automates whatever requirement they have so that you can simple include that part of your taxes with the full report. I expect there will be a sizable market for a wallet like that and whoever can implement it effectively will get the first shot at the market of people who plan to follow the IRS's regulations.

I agree somewhat but the idea they if you bought a bitcoin for 2c in 2009 or some such and used that bitcoin to buy a TV now ..you have to pay 598.98 capital
gains tax is kinda dumb

other stuff...

but yeah likely the IRS will never LET you mine $$$ out of air w/o getting their 25% off gross profits...esp if it all goes to giant corp mega farms in the next year

again i suspect it will go back to 20% capital gains tax if you sell the coin...maybe some more breaks for miners in usa

but likely mining will go to those places like (denmark?) that want to be a bitcoin hub not tax anything just to get the revenue in their country (belize?)

anyway so it goes

Searing

I considered the IRS ruling a huge positive for Bitcoin as it basically legitimized it and provided a precedent for other countries to follow.

Later this year when a truckload of wall street money comes pouring it, remember that it wouldn't have happened if the IRS did not clarify their position on Bitcoin.

Admitedly...if the bank had not messed up etc...i likely would have just sat on coin and waited till 2015 when likely congress will improve on or replace
the current tax guidelines of 2013....and then I would have announced if I wanted to be legal on a better setup 'eureka i had a good year in 2015' and
jumped on the parade then

it is not all bad I'm allowed 50% deduction on equip first year. usually it is 20% for 5 years (btc miners at this point are considered computer equip by my CPA
.other stuff last year as a new biz etc....so on 16k i made thought i'd have to pay 4K
only paid like 550 usd and that was to show a profit (need to show a profit for at least 3 of 5yrs I think?)..this year likely I also won't pay taxes...will start to taper it off
into the last few years here...so the way it works is even at 20% deduction the remaining years and 25% on gross mining if i keep things sensible I'll be very
close to NO taxes...maybe a bit of a loss..but then again considering the alternative i tripped into could be worse

Ideal situation is congress gets involved after fall elections say spring 2015 and gets rid of the IRS land/etc issues and maybe goes back to 20% if you spend the
coin and you equip purchases are NOT deductable ie your risk ...the way I was informally told in summer of 2013 it would shake out...asked CPA about bitcoin...
did you sell any? i said nope ..she said no problem

if that was to come to pass my CPA says it is LIKELY I'd be able to deduct the remaining equip from 2013 to 2015 and yet benifit from hopefully the more
sensible regulations imho say in 2015...if that happens I'll look like a bloody genius...if not well I'll probably muck on thru and jump thru some hoops and pay little
or no taxes anyway

big advantage is btc goes to 10k a coin i buy a house boat and IRS comes by ..how did you get the income...i can laugh ...i'm so squeaky legal clean now I smell
of pinecones and peppermint heh....ie "can't touch this'

the alternative of an alternate choice and ignoring the bank issues warning signs still gives me the 'heebie geebies"

I know others who are also legal ..pawn shop owner ..guys who sell gold/silver as a biz...they are all looked at closely...so they play by the rules

but yeah...if you can stay anon sit on coin till 2015 when hopefully rules are made better by congress on taxes.it is likely then you can 'come out' and go legal
and say "by golly to the IRS I had a great year in person to person trading!" heh

so could be a lot worse don't ya know but them wire xfers to knc and others for miners over 10k are gonna get some of us in trouble imho

Searing

That sucks man. Thanks for sharing the information though. Hopefully people heed the warning.

Oh God.  I don't know why buy that made me laugh so hard.  Save yourselves!

too late for me ...I'm like an otter that got tagged with a radio collar...the rest of you run........ run i say!

Searing

It is time to go deep into yourself, to your heart, and find that forgotten, big, fat, sacred NO.

'

If you are in USA and did wire xfers (and your bank messes up on them) and they are over 10k and you sign the following disclaimer....."i am not
using wire xfers internationally to hide taxes" .....your bank then calls you up says you are 'suspicious' and they are gonna freeze your account
 and they are gonna report you to IRS/SEC
etc for money laundering (they messed up 6x on a money order looked like 60k to the computer somewhere up the line at the bank..that red flag'd such) and
you need to come to the bank with your business tax forms for bitcoin mining and/other proof you are not a 'drug lord' i guess

yep happened to me...but i got to thinking that with 10 attempted wire xfers (me having to sign the form each time) and only 4 of them going thru
(of which 3 were refunded adding to the problem) ...that maybe just maybe in that 2013 was my first year mining I should file a tax return 2013
be a home business and eventually depreciate my equip purchases and pay the nice IRS people 25% on what I mine because I just KNEW this was
not gonna end well..getting the stink eye at the bank..weird looks ....too much paper on me..boy was i right!

and yep I was correct being paranoid paid off big time....took my tax forms to the bank .pointed out on my statement (which they never bothered to
look at) that 6 wire xfers were their fault and canceled the same day...much yelling at people by higher ups on wasted time etc

so yeah w/o the tax home biz stuff on virtual mining I'd be in a world of hurt with the IRS right now...(I think it is mandatory 1yr prison and up to 5 yrs
if deliberate tax evasion ..er gee IRS I don't know where them 40 coin came from ...yep I'd be toast now ..in a loving relations ship with 'bubba' in prision!)

So..with equip depreciation playing the deduction game I likely will get around the 25% tax on anything i mine or close to such and likely the rules will
be changed to something more sensible in 2015 (i hear both parties in gov't are not happy with the IRS calling it land/property etc)

So my point is IF YOU DID A  WIRE XFER OR USED A BTC EXCHANGE the IRS CAN find you...make sure you know how 'vulnerable' you are on such
miner purchases...also coinbase/btc exhcange/ etc are all 'bank legal' now in the USA ....in order for them to work they now have all the info on you
a bank does...so random audit/mistakes/whatever....unless you buy with BTC outside of exchanges ...miners with cash etc you could find yourself
in my boat

(alas...they got me boys.....don't look back legally 'supposed' to get taxed on 25% of stuff I mine (do get equip depreciation of 100% 5yrs thou) ....so
far have not legally have to paid last year any tax and thru 'legit deductions' same is likely this year..but it is a lot of dodging about and ducking around with the
CPA don't ya know

so yeah...keep the above in mind imho and if it does 'smell fishy' and gets weird at your bank....yep pays to be paranoid ...sometimes they really are out to get you!

needless to say i have a new bank

hope this helps save someone else alas I be lost now... 'legal' shudder

Searing

Okay that is a bit far. I mentioned this before, but the fact is that they are desperately looking for ways to control BTC as it takes out the middle man,the bank in this case. And who runs the bank? The Government, and what is the IRS? The Government

They are the criminals and all involved with the IRS should be arrested and tried for treason.

It will not be attempted to be enforced around the globe.

The IRS will only attempt to enforce rules in the US and for US citizens.

IRS will try and stop anything related to Bitcoin. They shouldn't dictate whether or not BTC mining is an income or not, it's crap.

Seconded. They have no way to verify how much bit coin I hold. I don't plan to cash any out but if I did I would use local bit coins to do it.

Pardon my French, but IRS can go down on their knees and well, you get it right?