Live data from Hacker News

IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

fortune.com

11–20 of 115 posts

Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

#11

This was just a matter of time. Welcome to the reality of being involved in the money business in the USA. Coinbase is concerned with the breadth of the request. That is actually kind of cute considering that your bank has to report any transaction over $10000 to the US Dept of Treasury and people are actively prosecuted on suspicion of making transactions under this threshold to avoid reporting requirements [1]. Whe…

Coinbase has to report SARs, as well- they're a fully licensed money transmitter in the US- so maybe tone down the condescension. This is an overreach of a different type and by a different government body, and would be precedent-setting AFAIK.

Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

#12

I think this is a pretty reasonable request if they only want Americans who traded bitcoin. The IRS and SEC have the power to compel brokerages to turn over trading records for people who bought/sold stocks on the stock market so the precedent is not only set but well established long, long, long ago. I mean if you traded bitcoin but didn't claim the income on your taxes, then you just blatantly and almost certainly…

Conflating coinbase with a brokerage seems a stretch to me.

Many people used it more like Paypal, a conduit to make or receive payments for sales of goods or services. With the conversion of bitcoin to regular currency happening very quickly. No buy/hold/trade activity, etc.

Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

#13

I think this is a pretty reasonable request if they only want Americans who traded bitcoin. The IRS and SEC have the power to compel brokerages to turn over trading records for people who bought/sold stocks on the stock market so the precedent is not only set but well established long, long, long ago. I mean if you traded bitcoin but didn't claim the income on your taxes, then you just blatantly and almost certainly…

The IRS isn't supposed to use these powers to go on "fishing expeditions", according to its own manual[1]. Requesting info on millions of users without particular suspicion is more broad than necessary.

[1] - http://www.forbes.com/sites/kellyphillipserb/2016/11/21/irs-...

Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

#14

It's really tempting to say that the IRS won't be able to do anything - you can't prove I spent/received this for type of activity.... but that's not how the IRS works. Once the IRS decides to audit, you are guilty until proven innocent. They will be elbow-deep into your figurative financial rectum, and you will (almost always) lose.

That's because they are very good at picking who to audit. If you can document all your deductions, and have all your sources of income declared, and stored it all together an audit consists of hitting print, handing the scanned copies to them, and waiting.

Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

#15
post #12

I think this is a pretty reasonable request if they only want Americans who traded bitcoin. The IRS and SEC have the power to compel brokerages to turn over trading records for people who bought/sold stocks on the stock market so the precedent is not only set but well established long, long, long ago. I mean if you traded bitcoin but didn't claim the income on your taxes, then you just blatantly and almost certainly…

Conflating coinbase with a brokerage seems a stretch to me. Many people used it more like Paypal, a conduit to make or receive payments for sales of goods or services. With the conversion of bitcoin to regular currency happening very quickly. No buy/hold/trade activity, etc.

If you made money on ebay, deposited to your PayPal, and then spent elsewhere, and did not claim that money on your American taxes, you would be evading taxes by not reporting taxable income.

Same here.

Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

#16

This was just a matter of time. Welcome to the reality of being involved in the money business in the USA. Coinbase is concerned with the breadth of the request. That is actually kind of cute considering that your bank has to report any transaction over $10000 to the US Dept of Treasury and people are actively prosecuted on suspicion of making transactions under this threshold to avoid reporting requirements [1]. Whe…

This, absolutely. I'm actually surprised the government showed their hand so soon. There must be a lot of money in Bitcoin already. The government WANTS people to go 100% digital with their capital. It is infinitely easier to track digital money. Bitcoin is something they're against because the anonymity factor. I won't be surprised if we see some legislation to block or inhibit anonymous digital currency.

Let's not forget that the US will really want to "own" or be in control of any significant digital currency. Since the US dollar is the world reserve currency, the US wields unprecedented economic power on a global scale. Any currency that has the potential or shows signs of shaking that up will be on the radar for the US govt and the Fed, as controlling currency is the means by which one can control the economic destiny of any nation(s). As we saw with Egypt, for example, several years ago. A simple change in US monetary policy can result in the overthrowing of foreign governments!

Interesting side anecdote: A person very close to me purchased Bitcoin on the stock market, but Bank of America froze the account on suspicion / risk of money laundering or general FUD. It isn't clear how much of this was due to the bank or the government, as they are in bed together, but it prevented this person from being able to trade Bitcoin in his account anymore. Sadly, had his account not been frozen, he would have doubled his money.

N.B. Citations needed, obviously. Commenting on mobile makes this challenging.

Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

#18

This was just a matter of time. Welcome to the reality of being involved in the money business in the USA. Coinbase is concerned with the breadth of the request. That is actually kind of cute considering that your bank has to report any transaction over $10000 to the US Dept of Treasury and people are actively prosecuted on suspicion of making transactions under this threshold to avoid reporting requirements [1]. Whe…

Coinbase has to report SARs, as well- they're a fully licensed money transmitter in the US- so maybe tone down the condescension. This is an overreach of a different type and by a different government body, and would be precedent-setting AFAIK.

SARs only apply to suspicious activity. CTRs are what your bank has to file for every transaction over $10000.

Also, it's all the Dept. of Treasury. The IRS is essentially the collection agency of the Dept. of Treasury.

It's listed as a bureau on the U.S. Treasury's website. https://www.treasury.gov/about/organizational-structure/bure...

Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

#19
post #15
post #12

Earlier quoted context omitted.

Conflating coinbase with a brokerage seems a stretch to me. Many people used it more like Paypal, a conduit to make or receive payments for sales of goods or services. With the conversion of bitcoin to regular currency happening very quickly. No buy/hold/trade activity, etc.

If you made money on ebay, deposited to your PayPal, and then spent elsewhere, and did not claim that money on your American taxes, you would be evading taxes by not reporting taxable income. Same here.

But the IRS has not asked for Paypal to dump their entire database of all payments and customers.

Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

#20
post #16

This was just a matter of time. Welcome to the reality of being involved in the money business in the USA. Coinbase is concerned with the breadth of the request. That is actually kind of cute considering that your bank has to report any transaction over $10000 to the US Dept of Treasury and people are actively prosecuted on suspicion of making transactions under this threshold to avoid reporting requirements [1]. Whe…

This, absolutely. I'm actually surprised the government showed their hand so soon. There must be a lot of money in Bitcoin already. The government WANTS people to go 100% digital with their capital. It is infinitely easier to track digital money. Bitcoin is something they're against because the anonymity factor. I won't be surprised if we see some legislation to block or inhibit anonymous digital currency. Let's not…

> Interesting side anecdote: A person very close to me purchased Bitcoin on the stock market, but Bank of America froze the account on suspicion / risk of money laundering or general FUD. It isn't clear how much of this was due to the bank or the government, as they are in bed together, but it prevented this person from being able to trade Bitcoin in his account anymore. Sadly, had his account not been frozen, he would have doubled his money.

I highly doubt your contact bought bitcoin on the stock market, since there hasn't been an ETF launched. They might've bought bitcoin on an bitcoin exchange and had their bank account frozen- it still happens frequently. Banks in the US are still scared to do business with bitcoin folks because they don't want to get undue attention down the line (eg Operation Chokepoint), and banking a potential MSB is more difficult ("know your customer's customers").

Post reply on HN