In hopes that there is no future tax law associated with digital currency, is there truth to having to claim the money you transfer from your wallet to your bank account as income? The banks, as far as I know, only report interest earned on an account. Which would be fine if you are with a large bank, but a credit union reports the money the interest is earned from to the IRS.
Anyone have insight or thoughts as to how this tax on income actually works after transferring the money from a wallet?
Topic: Not filing taxes with bitcoin (Read 3469 times)
Let's say i purchased 5 BTC through Coinbase, and made some killer altcoin trades and ended up with 50 BTC. Now let's say i send this 50btc ($21k at its current exchange at $420usd (lol)) back to Coinbase to have it deposited into my bank account, i'm assuming this would reach the irs and i'd get hit with a bill. Not a big deal really, I'm not crying over it, but what kind of percentage would they be asking for?
OR lets say i transferred this 50btc at $400/week into my bank account instead of all at once.... would this still be monitored/reported?
OR lets say i transferred this 50btc at $400/week into my bank account instead of all at once.... would this still be monitored/reported?
from what I have heard so far, you definitely do not want to be claiming losses from BTC at this point (as a write off on your taxes). Even though it is quite possible for some people to have lost some money due to bad timing over the last year, since BTC is so new, it is almost like an instant way to get audited.
Just because you are audited doesn't mean anything bad will happen to you. If you have Fixed that for you.
from what I have heard so far, you definitely do not want to be claiming losses from BTC at this point (as a write off on your taxes). Even though it is quite possible for some people to have lost some money due to bad timing over the last year, since BTC is so new, it is almost like an instant way to get audited.
Just because you are audited doesn't mean anything bad will happen to you. If you have Fixed that for you.
Only when the IRS sees bitcoin as a serious revenue threat, and exchanges start providing inputs to them, will they start going after people who have made gains on bitcoins.
it depend how you sold those btc, if it is face to face, then they can't track you back so easily, otherwise via exchange you will get in troubles some day(here also it depend on the amount)
Even with face to face trades you will still receive cash that you would either deposit in the bank or spend somehow. The IRS can look at your standard of living and decide that it is too high for your reported income. what about i keeps them in my house, and use them for something like food or other thing that cannot be trackable?
for example if i convert 1M(i declare to IRS only 100k) and use the rest only for food/things that not generate invoice ecc..they can't do nothing i think
I don't file mine either. My bit coin is not owned by them and I will not pay them for the privilege of using them.
This is not how it works. If you are a US citizen then you owe taxes on all of your income regardless of where you earn it. This is the law. When they start following their laws I might do the same. In the mean time good luck proving how much I own and where it is.
it depend how you sold those btc, if it is face to face, then they can't track you back so easily, otherwise via exchange you will get in troubles some day(here also it depend on the amount)
Even with face to face trades you will still receive cash that you would either deposit in the bank or spend somehow. The IRS can look at your standard of living and decide that it is too high for your reported income. what about i keeps them in my house, and use them for something like food or other thing that cannot be trackable?
for example if i convert 1M(i declare to IRS only 100k) and use the rest only for food/things that not generate invoice ecc..they can't do nothing i think
If they have evidence that you are hiding something, they could search your home, computers, etc. for hidden assets. Although that would be rare.
Actually, you writing this post is probably enough evidence to start an investigation.
Actually, you writing this post is probably enough evidence to start an investigation.
from what I have heard so far, you definitely do not want to be claiming losses from BTC at this point (as a write off on your taxes). Even though it is quite possible for some people to have lost some money due to bad timing over the last year, since BTC is so new, it is almost like an instant way to get audited.
Just because you are audited doesn't mean anything bad will happen to you. If you have done nothing wrong then an audit will be nothing more then a small headache. If you accurately report your income and don't over report your deductions then nothing bad will happen to you, and if you were to under report your deductions you could receive a refund. I think the IRS is targeting large mining facilities or pools, miner retailers, may be gambling sites. I do not belief they are clamping down on individuals, yet. Enjoy your honeymoon while you can.
I would say the IRS is targeting large exchanges that are not complying with AML regulations and face to face traders who are charging large premiums (and not reporting anything "suspicious" to law enforcement). 
it depend how you sold those btc, if it is face to face, then they can't track you back so easily, otherwise via exchange you will get in troubles some day(here also it depend on the amount)
Even with face to face trades you will still receive cash that you would either deposit in the bank or spend somehow. The IRS can look at your standard of living and decide that it is too high for your reported income.
it depend how you sold those btc, if it is face to face, then they can't track you back so easily, otherwise via exchange you will get in troubles some day(here also it depend on the amount)
I think the IRS is targeting large mining facilities or pools, miner retailers, may be gambling sites. I do not belief they are clamping down on individuals, yet. Enjoy your honeymoon while you can.
from what I have heard so far, you definitely do not want to be claiming losses from BTC at this point (as a write off on your taxes). Even though it is quite possible for some people to have lost some money due to bad timing over the last year, since BTC is so new, it is almost like an instant way to get audited.
Agreed, I think there have a couple threads about people getting investigated or audited because they counted mining as a loss against other income, which is just plan stupid at this point.
Exactly...and the most you can claim in the losses is 3k (I believe), which isn't nearly worth the hassle of an audit, or the amount that you would likely be paying to the IRS after an audit
from what I have heard so far, you definitely do not want to be claiming losses from BTC at this point (as a write off on your taxes). Even though it is quite possible for some people to have lost some money due to bad timing over the last year, since BTC is so new, it is almost like an instant way to get audited.
Agreed, I think there have a couple threads about people getting investigated or audited because they counted mining as a loss against other income, which is just plan stupid at this point.
from what I have heard so far, you definitely do not want to be claiming losses from BTC at this point (as a write off on your taxes). Even though it is quite possible for some people to have lost some money due to bad timing over the last year, since BTC is so new, it is almost like an instant way to get audited.
I don't file mine either. My bit coin is not owned by them and I will not pay them for the privilege of using them.
This is not how it works. If you are a US citizen then you owe taxes on all of your income regardless of where you earn it. This is the law.
I don't file mine either. My bit coin is not owned by them and I will not pay them for the privilege of using them.
So I have bought and sold plenty of btc, and haven't filed a single bitcent to the IRS. So what? I do it rather openly and don't care much about hiding my paper trail (coinbase, exchanges, purchases on websites, etc).
Now how are they actually going to implement and enforce taxation of bitcoin transactions? Currently the infrastructure to actually regulate the taxation of bitcoin is nearly non-existence, and it's solely based on the honor system. Sure you could believe the conspiracy that the governments are already tracking bitcoin transactions, but I don't buy it. So again, why should I comply, and what happens when I don't?
Now how are they actually going to implement and enforce taxation of bitcoin transactions? Currently the infrastructure to actually regulate the taxation of bitcoin is nearly non-existence, and it's solely based on the honor system. Sure you could believe the conspiracy that the governments are already tracking bitcoin transactions, but I don't buy it. So again, why should I comply, and what happens when I don't?
Depending on the amount of deposits into your actual bank account, you may be exposing yourself to a risk of an audit. If the IRS red flags you for an audit, you will have to be able to produce receipts for everything that you have written off on your taxes, and you will have to pay taxes on all the unclaimed gains. The crappy part is that you would probably get audited for the previous 3 years.
Worst case is your bank accounts get frozen and they start garnishing your wages... If you are burying a couple hundred bucks that is one thing, but if you are not claiming tens of thousands, that is a different beast entirely
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