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IRS sends warning letters to more than 10k cryptocurrency holders

wsj.com

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

#251

Post by mamon »

JumpCrisscross wrote: post #227
msandford wrote: post #183

Earlier quoted context omitted.

So that's why we can't ever have some deflation here in the modern US, it would reduce tax revenue! I always wondered about that. In this light it makes perfect sense.

> that's why we can't ever have some deflation here in the modern US, it would reduce tax revenue Deflation also increases the buying power of that tax revenue. We avoid deflation because it incentivises hoarding currency over productive activity. We also know how to stop inflation--raise rates. We don't have reliable tools for fighting deflation (see: Japan). (Also, it's not true that we've never seen deflation. Aro…

>> We avoid deflation because it incentivises hoarding currency over productive activity.

No, it incentivises reasonable spending on things you need and saving the rest over mindlessly throwing money on useless crap because your money lose value every day.

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

#252

Post by briandear »

criley2 wrote: post #199
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…

Another word of advice: The standards of the FDA and the IRS are very different, and the FDA is used to corporations acting maliciously while limiting liability for those involved. The IRS on the other hand with these kinds of notices is not out to get you, and I don't believe I've ever heard of someone being charged with perjury for signing an IRS document that wasn't true (and they genuinely thought it was true), e…

> The IRS on the other hand with these kinds of notices is not out to get you.

Citation needed. The IRS can be among the most vicious of any federal agency. Having dealt with FATCA situations with overseas Americans, Treasury is, in my experience, nobody’s friend.

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

#253

Post by jcranberry »

gnulinux wrote: post #188
crypto_throwa wrote: post #142

Earlier quoted context omitted.

Here's one situation where it is very different. Say I get paid 100 BTC for doing a job worth $100/BTC at the time or $10000. Now, say BTC drops to $1/BTC. I owe income tax on the $10000. Let's say I owe $2000 (20%) in taxes. However, I only have $100 now. My effective tax rate is 2000%. This does allow for a small deduction of capital gains each year. However you can only deduct $3000 a year in capital gains. In a l…

What if you get paid in meat, $100k worth of meat, but then you spoil all of them so they're now worth $0. It's not government's problem if your currency is volatile. You can find a job that doesn't pay you in BTC.

Great response, really clear and simple

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

#254

Post by modeless »

berberous wrote: post #205
modeless wrote: post #52

> One version of the letter recently uploaded to the IRS website asks recipients who believe they have followed the law to sign a statement Does anyone have a link to the letters? It drives me mad that journalists refuse to link to primary sources.

IRS News release: http://src.bna.com/KeG Letter 6174-A: http://src.bna.com/KeH Letter 6173: http://src.bna.com/KeI Letter 6174: http://src.bna.com/KeJ

This is exactly what I was looking for, thank you! If I get one of these I may call their hotline and ask them to clarify how airdrops should work.

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

#255

Post by joosters »

briandear wrote: post #252
criley2 wrote: post #199

Earlier quoted context omitted.

Another word of advice: The standards of the FDA and the IRS are very different, and the FDA is used to corporations acting maliciously while limiting liability for those involved. The IRS on the other hand with these kinds of notices is not out to get you, and I don't believe I've ever heard of someone being charged with perjury for signing an IRS document that wasn't true (and they genuinely thought it was true), e…

> The IRS on the other hand with these kinds of notices is not out to get you. Citation needed. The IRS can be among the most vicious of any federal agency. Having dealt with FATCA situations with overseas Americans, Treasury is, in my experience, nobody’s friend.

> Citation needed.

I don't believe I've ever heard of someone being charged with perjury for signing an IRS document that wasn't true

You could look for some perjury charges if you disbelieve.

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

#256

Post by VLM »

rolltiide wrote: post #20

Having talked to many people I do believe there is low tax compliance, but having read how the IRS rationalized the Coinbase subpoena to the judge I realize they have no idea to tell if they have compliance or not. They merely did a search string for 2015 for "bitcoin" in tax filings and found 800 people filed that way. So I checked my 2015 tax filings and saw I had manually entered "LTC" for closing a litecoin trade…

"Coinbase doesn't know what any of the holdings or transactions represent"

I had a KYC interview with Coinbase wondering where my coins came from. (I mined them in the 2009 to 2010 era when they were worthless, mined before the famous 10000 bitcoin pizza delivery, LOL). So they have a statement from me, which is probably now on file with the IRS.

Now here's a puzzler... I got my 6174-A and so I verified my coinbase register and old tax form reported cap gains from sales match to the penny. Which they do. So now what do I do, just sweat I guess.

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

#257

Post by JumpCrisscross »

mamon wrote: post #251
JumpCrisscross wrote: post #227

Earlier quoted context omitted.

> that's why we can't ever have some deflation here in the modern US, it would reduce tax revenue Deflation also increases the buying power of that tax revenue. We avoid deflation because it incentivises hoarding currency over productive activity. We also know how to stop inflation--raise rates. We don't have reliable tools for fighting deflation (see: Japan). (Also, it's not true that we've never seen deflation. Aro…

>> We avoid deflation because it incentivises hoarding currency over productive activity. No, it incentivises reasonable spending on things you need and saving the rest over mindlessly throwing money on useless crap because your money lose value every day.

> over mindlessly throwing money on useless crap because your money lose value every day

Your have more choices than spending and hoarding. Buying Treasuries, for instance, yield around inflation. (TIPs if you're more worried.) To say nothing of the entire universe of investable assets, from commercial paper to venture capital.

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

#258

Post by colecut »

navigatesol wrote: post #166
colecut wrote: post #100

Earlier quoted context omitted.

Where things get bad is when you buy a coin, it goes up 10x, at the beginning of the next tax year you sell and buy some other coin, it goes down to where you bought the first coin, and now instead of being where you started, you owe 2-4x..

How is this any different than selling a house for $1 million, putting that $1 million into a different house, and then the value of that new house falls to $100k? If you sell the second house for $100k, you're on the hook for the tax on the net capital gains.

I guess it's just more likely in crypto, and with crypto your money was a "currency" the whole time, not an asset.

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

#259

Post by bonestamp2 »

briandear wrote: post #252
criley2 wrote: post #199

Earlier quoted context omitted.

Another word of advice: The standards of the FDA and the IRS are very different, and the FDA is used to corporations acting maliciously while limiting liability for those involved. The IRS on the other hand with these kinds of notices is not out to get you, and I don't believe I've ever heard of someone being charged with perjury for signing an IRS document that wasn't true (and they genuinely thought it was true), e…

> The IRS on the other hand with these kinds of notices is not out to get you. Citation needed. The IRS can be among the most vicious of any federal agency. Having dealt with FATCA situations with overseas Americans, Treasury is, in my experience, nobody’s friend.

True, but I think the rest of the comment does a good job of clarifying what he means... they're not (typically) out to get you for the purpose of putting the average person in jail; however, they are out to get money from you if you owe them.

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

#260

Post by [deleted] »

umvi wrote: post #45
fortran77 wrote: post #4

This is no different from any other profit or gain. The Government isn't specifically targeting these people; it just wants them to make sure they realize it's like any other investment.

I hate that people treat currencies as an "investment". In my mind, crypto concurrency is the perfect value-store (like gold used to be), not an appreciating asset. Yet because people treat it like stocks, it behaves like stocks.

[deleted]
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