Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

IRS sends warning letters to more than 10k cryptocurrency holders

wsj.com

Post reply on HN
Print view View original

211–220 of 416 posts

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#211

Post by belltaco »

buzzert wrote: post #134
yellowstuff wrote: post #117

Earlier quoted context omitted.

Two reasons: * H&R Block and Intuit have good lobbyists who prevent it from happening. * Republicans want to make filing taxes difficult so that people won't like taxes. In particular Grover Norquist has managed to get essentially all federal level Republican politicians to sign a pledge not to raise taxes, and Norquist considers making filing simpler to be effectively raising taxes. https://www.politico.com/agenda/s…

I'm sure those aren't the only reasons. Quite a lot of people get away with tax fraud. If the IRS really knew everything and filing taxes was just a pointless exercise, why is fraud so prevalent?

Long read but worth it.

https://www.propublica.org/article/how-the-irs-was-gutted

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#212

Post by verdverm »

pard68 wrote: post #101

So the real question is, what exchange can I use as an American that doesn't report to the IRS?

The IRS and Coinbase are starting to track the money flow, so even if you used some other exchange, you can still be traced. Pay your taxes

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#213

Post by xamuel »

donclark wrote: post #64

So why do we have to file? Why cant the IRS just tell us every year if we owe or not and how much?

A serious answer that isn't just "lobbyists":

Even if the IRS had perfect info about all your income and investments, there are decisions you can make which effectively make taxes non-deterministic. Suppose on two different dates, you bought shares of a company. Then on a later date, you sold one share. You get to choose which purchase date to count the sale as being against. This is important because you pay on the profit made based on that assumption. It also effects whether you pay short-term or long-term capital gains taxes for the sale.

Say for example you bought 1 share for $100 two years ago, and another share for $500 one month ago. One week ago, you sold one share for $1000. If you count it as selling the $100 share, then you must pay taxes on $900 in profit, BUT you enjoy the lower long-term capital gain tax rate. If you count it as selling the $500 share, you must pay taxes on only $500 in profits, BUT you suffer the short-term capital gain tax rate. Which of the two should you do (if you're a hypothetical perfectly rational actor who always makes absolutely optimal decisions)? Depends on what you plan to do with the other share, what you think is going to happen to the stock price, and so many other factors you could write a 10,000-page book about them...

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#215

Post by ascagnel_ »

pard68 wrote: post #101

So the real question is, what exchange can I use as an American that doesn't report to the IRS?

The real question is what can you do to avoid litigation and possible criminal charges for tax evasion -- _any_ transaction needs to be reported to the IRS, and willful evasion will generally lead to criminal charges.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#217

Post by Rychard »

kazinator wrote: post #113
hcurtiss wrote: post #13

I'm sure there's a lot to know about this topic, but it's odd to me that they'd treat a "currency" as an appreciating asset. If I'm given a dollar (or peso) as change, and if between the time I receive the dollar and the time I spend it the currency purchasing power increases, I do not pay taxes on that gain. I can just buy more stuff with that dollar (including other currencies). In this instance, where it's increas…

Come on; if you do Forex trading, you will pay taxes on your gains. If you earn a dollar for your labor, and then hold on to it while its purchasing power increases before making a purchase, that increase is not taxable of course. It's not even quantifiable. Purchasing power can increase faster relative to a specific commodity that gets cheaper faster than other goods. If you buy a currency and sell it later at a pro…

Where can I obtain these magical dollars whose purchasing power increases over time?

The purchasing power of all my dollars seems to go down the longer I hold onto them.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#218

Post by sfkdjf9j3j »

171243 wrote: post #196
teej wrote: post #25

Earlier quoted context omitted.

I believe this is where a lot of the confusion comes from. If you use Coinbase to directly trade crypto (e.g. BTC for ETH) this is a taxable event on your BTC even though you never touch fiat in the process.

Didn't this recently change? Prior to 2018 was it not considered a "like for like" transaction?

Only against the advice of most accountants. Exchanges between different grades of the same precious metal aren't considered like kind transactions, so it seems pretty unlikely this "trick" would work for crypto.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#219

Post by codesushi42 »

caseysoftware wrote: post #209
bilbo0s wrote: post #161

Earlier quoted context omitted.

> One version of the letter recently uploaded to the IRS website asks recipients who believe they have followed the law to sign a statement... Just a word of advice to anyone who may be receiving letters like this in the future. Do not, under any circumstances, sign a statement that you have followed the law without consulting with qualified counsel first. You should know that every time you sign off on something to…

This is why "lying to investigators" is such a bs charge. It's incredibly easy to do what you think is the right thing but still "lie" because you didn't know/understand all the facts, implications, and details. Always, always, always, get qualified legal/accounting counsel involved. No, your uncle the family law attorney is not qualified.

Never, ever talk to the authorities directly. Always hire an attorney. Exercise your fifth amendment rights.

Re: IRS sends warning letters to more than 10k cryptocurrency holders

#220

Post by yellowstuff »

buzzert wrote: post #134
yellowstuff wrote: post #117

Earlier quoted context omitted.

Two reasons: * H&R Block and Intuit have good lobbyists who prevent it from happening. * Republicans want to make filing taxes difficult so that people won't like taxes. In particular Grover Norquist has managed to get essentially all federal level Republican politicians to sign a pledge not to raise taxes, and Norquist considers making filing simpler to be effectively raising taxes. https://www.politico.com/agenda/s…

I'm sure those aren't the only reasons. Quite a lot of people get away with tax fraud. If the IRS really knew everything and filing taxes was just a pointless exercise, why is fraud so prevalent?

Sure, taxes couldn't be fully automated, but those are the reasons the IRS won't just send you a pre-filled form with the information they have, and instead makes the taxpayer duplicate that information.
Post reply on HN