I have always reported my virtual currency earnings by providing my deposits to Coinbase at tax time. Then again, I use Coinbase strictly to buy things with bitcoin, not as an investment tool.
IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
41–50 of 115 posts
Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
#42Earlier 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.
> 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. I'm glad you brought this up because it just strengthens my point. Paypal reports US account transactions to the IRS once they go over a certain size. https://www.paypal.com/us/webapps/mpp/irs6050w
So does coinbase.
Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
#43I made a whole $50 on Coinbase. I expected some tax form to arrive, and it never came. Honestly I completely forgot about it until I saw this. I wonder if that $50 will end up being hundreds owed in some kind of late fees/etc.
I'm pretty sure they'll be overwhelmed by going after larger fish and nothing will ever come of it for such a small amount.
Well, unless they scale it - like for example going to Coinbase and asking for all accounts created between 2013 and 2015 :)
Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
#44I made a whole $50 on Coinbase. I expected some tax form to arrive, and it never came. Honestly I completely forgot about it until I saw this. I wonder if that $50 will end up being hundreds owed in some kind of late fees/etc.
I'm pretty sure they'll be overwhelmed by going after larger fish and nothing will ever come of it for such a small amount.
Well, unless they scale it - like for example going to Coinbase and asking for all accounts created between 2013 and 2015 :)
Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
#45Earlier quoted context omitted.
If your point is that it has a bank's level of scrutiny, then no it clearly does not stand. I mean isn't that the point of the government request? A bank's level of scrutiny would mean the government could reasonably guess if you are holding out on taxes which is clearly not the case here. Does the IRS regularly subpoena Chase and BofA's customer records. No, because there is no need. Thanks to the CTRs, they can cru…
To your point about SARs / CTRs- SARs at banks are usually triggered by cash deposits and withdrawals at a much lower level, and every bitcoin transaction is roughly equivalent to a cash transaction. Thus "bank-level scrutiny". > I mean isn't that the point of the government request? It's not clear to me whether they actually need this at all, considering Coinbase's existing reporting requirements. It's common enough…
You're fixated on SARs being comparable to CTRs and they just aren't. First, a SAR is only for suspicious activity and it's relatively uncommon, a CTR is not optional and very common. If a SAR is being filled out, it's after trying to get in touch with the person to better understand their business and why various transactions look suspicious. It's not undertaken lightly. It's not a routine filing whereas CTR's are.
Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
#46What's interesting here is that bitcoin is both an "investment" and "currency" (since you can pay for [some] goods and services with btc directly). From the "currency" point of view - exchange rate (FX) gains/losses technically only apply to officially recognized foreign currencies. So that is an interesting can of worms. If I buy bitcoin at price point X, it goes up to X+Y, but instead of selling it I use that Y to…
They can be an income source if you mine, too.
Even more fun, if you mine back in the old days when difficulty was 3-digits, and then sell years later, they can be a long term capital gain.
Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
#47Earlier quoted context omitted.
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.
US tax law is so dense and complicated that they can effectively implicate anyone they choose. Having worked with numerous small businesses in the past, do you know how many of them could readily provide carbon copy receipts for every single deduction they claimed in the last X years? I think there is a valuable discussion to be had about the power of a federal agency that can so easily zero their sights on anyone th…
> do you know how many of them could readily provide carbon copy receipts for every single deduction they claimed in the last X years?
So on what basis did they take those deductions in the first place, if they didn't have the documentation to figure out what their deduction was in the first place? Did they just guess? Or are you saying they had it for one tax season and then destroyed it?
Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
#48I made a whole $50 on Coinbase. I expected some tax form to arrive, and it never came. Honestly I completely forgot about it until I saw this. I wonder if that $50 will end up being hundreds owed in some kind of late fees/etc.
They will probably not go after anyone who made less than like $500. Remember each time they go after someone it costs them money too.
The IRS is kind of strapped for money. I suspect the threshold is way over $500.
Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
#49I buy a small amount (about $20 worth) every paycheck, so I'm really not sure how to even report that reasonably. With such a volatile price, I don't really know how much it's gone up or down without some serious calculations. I'm not really sure what to do about that. I was just about to sell some of it too, to help cover some recent expenses.
I had the same problem with the Canadian equiv (CRA).
I just treated it like I bought it all at $0 / BTC. I was selling between $100 and $1000, with an average purchase price between $4 and $10, so the cost was basically minuscule.
Re: IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case
#50This 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…
I've said for a long time that the problem digital currency proponents seem to be missing is that there is nothing intrinsic to the technology that prevents it from being regulated. A bill is already up in California that requires businesses to report anyone who uses it. The only reason it hasn't been heavily regulated is because it hasn't become big enough to be on the radar yet. The second it is, it will become like anything else.