IRS sends warning letters to more than 10k cryptocurrency holders • Hacker News Board

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

#321

Post by kosievdmerwe » Fri, Jul 26, 2019, 10:33 PM UTC

jefftk wrote: post #318

blhack wrote: post #317

To highlight how nuts this could be: I travel to India every year, and I always carry with me a few hundred USD worth of rupees (the local currency). It would be insane for me to try and track the value of the rupees (in USD) for every time I bought something, and calculate the deltas between that and what I originally gave to the money changer. It is completely impractical to do that, and while I'm not an accountant…

The IRS has decided to treat cryptocurrency as an asset (like gold) instead of a currency.

Well a lot of people are treating cryptocurrencies as speculative assets. ICOs wouldn't have been such a big thing if people didn't do that.

So why shouldn't the IRS do the same?

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

#322

Post by JackFr » Fri, Jul 26, 2019, 10:34 PM UTC

benburleson wrote: post #295

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…

The wording is a bit slippery. I believe that one could get into big trouble for truly not knowing they were not in compliance, but the fact that is says "who believe," to me, means, "as far as I am aware, this is true." There are a lot of undeclared assumptions in that statement, and all of those are at the cost of the person signing that statement. Alternatively, we see politicians walking back false statements or…

Former investment banker and President of the New York Fed, Timothy Geithner in his confirmation testimony to become Secretary of the Treasury [credibly, I would say] maintained that he had misunderstood the code and mistakenly underpaid his taxes by $34,000. If he can't understand the tax code, how can we.

At the end of the day, the IRS just wants their money.

On the other hand, IANAL, but a tax lawyer once said to me the only thing you go to jail for is hiding money. You can claim weird deductions, invent new depreciation schemes, misapply rules and all the IRS will do is say "No" and stick you with a bill. But if you're hiding income, it really upsets them.

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

#323

Post by garmaine » Fri, Jul 26, 2019, 10:34 PM UTC

blhack wrote: post #312

enobrev wrote: post #305

Earlier quoted context omitted.

I haven't seen the letters. Isn't that considered a federal crime since it's fraud via the US Postal Service?

Isn't it fraud already a federal crime?

Federal? No. You defraud someone and it is state, local, or even civil.. unless circumstance (e.g. via mail) makes it a federal offense.

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

#324

Post by garmaine » Fri, Jul 26, 2019, 10:36 PM UTC

wpietri wrote: post #284

dawhizkid wrote: post #46

So long as this is the case how can it possibly make sense to use bitcoin to actually transact e.g. fulfill the vision of bitcoin as "digital money" if every time you buy a cup of coffee with bitcoin the expectation is that you'd have to calculate capital gains and report every year?

This is true for any foreign currency, and it's exactly why a country tends to converge on exactly one currency, even when it's illegal. Dealing with multiple currencies on a daily basis is a giant pain in the ass. Europe is an instructive example here. Most of a continent was sick enough of the hassle that they eliminated 19 currencies in favor of the Euro [1] Another good example is Ecuador. In the 1980s, both curr…

No, this is not the case. For foreign currency there is a low-value transaction exemption. If you go on vacation in Italy you don’t have to report forex income/loss for every meal. But if you came back with an Italian sports car, you would.

Not so with bitcoin, which the IRS taxes every transaction, no matter how small.

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

#325

Post by Analemma_ » Fri, Jul 26, 2019, 10:37 PM UTC

blhack wrote: post #320

jefftk wrote: post #318

Earlier quoted context omitted.

The IRS has decided to treat cryptocurrency as an asset (like gold) instead of a currency.

Which I think is a mistake. The tax code should be accommodating; it should not be adversarial. Many people do not treat bitcoin like gold, they treat it like a paypal account.

Strongly disagree. In terms of both actual usage and the rhetoric I most commonly see on crypto fora (“digital gold!”, “store of value!”), commodity, not currency, is the correct categorization.

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

#326

Post by lonelappde » Fri, Jul 26, 2019, 10:37 PM UTC

benburleson wrote: post #295

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…

The wording is a bit slippery. I believe that one could get into big trouble for truly not knowing they were not in compliance, but the fact that is says "who believe," to me, means, "as far as I am aware, this is true." There are a lot of undeclared assumptions in that statement, and all of those are at the cost of the person signing that statement. Alternatively, we see politicians walking back false statements or…

The standard of law for civilians is much higher than for people in government, sadly.

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

#327

Post by patrioticaction » Fri, Jul 26, 2019, 10:38 PM UTC

kosievdmerwe wrote: post #321

jefftk wrote: post #318

Earlier quoted context omitted.

The IRS has decided to treat cryptocurrency as an asset (like gold) instead of a currency.

Well a lot of people are treating cryptocurrencies as speculative assets. ICOs wouldn't have been such a big thing if people didn't do that. So why shouldn't the IRS do the same?

The ICO market crashed and trading volume on crypto exchanges keeps dipping lower and lower and lower. Its main use-case has shifted back to currency after a failed bid as a security.

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

#328

Post by lonelappde » Fri, Jul 26, 2019, 10:39 PM UTC

jfk13 wrote: post #299

anonymous5133 wrote: post #191

Earlier quoted context omitted.

Exactly. It falls in line with similar to "don't talk to the police". Just keep quiet. This applies to everything when dealing with any government agency. The government is not your friend.

I'm guessing you're American. It saddens me that so many of you over there seem to have this view of your own government and institutions. Anecdote time. Having been stopped by police in the States four times (that I can recall offhand) over the years -- with a legitimate justification in each case -- my experience has been that courtesy and cooperation have served me well. On a couple of occasions when I could quite…

It depends if you look like someone powerful and wealthy enough to fight back against abusive overreach, or not.

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

#329

Post by ergothus » Fri, Jul 26, 2019, 10:40 PM UTC

codesushi42 wrote: post #219

caseysoftware wrote: post #209

Earlier quoted context omitted.

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.

This advice is good, but never addresses the issues of: - cost - impact to work - fear of retaliation (Oh, that's illegal? Show me how that will be dealt with in ways that don't negatively impact my job/family/bank account)

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

#330

Post by blhack » Fri, Jul 26, 2019, 10:41 PM UTC

Analemma_ wrote: post #325

blhack wrote: post #320

Earlier quoted context omitted.

Which I think is a mistake. The tax code should be accommodating; it should not be adversarial. Many people do not treat bitcoin like gold, they treat it like a paypal account.

Strongly disagree. In terms of both actual usage and the rhetoric I most commonly see on crypto fora (“digital gold!”, “store of value!”), commodity, not currency, is the correct categorization.

Maybe there should be a third category then.