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

IRS Requests Bitcoin Buyer Records in Broad Tax Evasion Case

fortune.com

Post reply on HN
Print view View original

101–110 of 115 posts

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

#101

Post by forgetsusername »

jonaf wrote: post #16
ryaniscool wrote: post #5

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…

>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!

You have your causation reversed. The USD is the global reserve currency because of the power and stability of the United States. People choose to use it, they aren't forced to.

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

#102

Post by loeg »

logfromblammo wrote: post #90
loeg wrote: post #71

Earlier quoted context omitted.

> I wonder if that $50 will end up being hundreds owed in some kind of late fees/etc. No. Penalties are proportionate.

Spoken like someone who has never been penalized by the IRS. If you get a zealous agent, they will tack on anything even remotely plausible to nail you with. If you get an "it's a job" agent, they will do the minimum amount of work to process your file out of their inbox. The difference between the two can be thousands of dollars, not just hundreds.

It really depends on how you underpaid or underreported your taxes:

https://en.wikipedia.org/wiki/IRS_penalties

Note that you can only be penalized if you screwed up. If you've paid your taxes appropriately, there is no penalty. So yeah, to the best of my ability I've filed my taxes accurately and paid the amount due, and I've never had to pay an IRS penalty.

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

#103

Post by evgen »

mhluongo wrote: post #20
jonaf wrote: post #16

Earlier quoted context omitted.

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 wou…

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

Banks also don't want to do business with bitcoin exchanges because this makes it trivial to loot an account over which you have gained unauthorised access. At the moment the bittcoin market consists primarily of people who value privacy over convenience and criminals. Until the former gets larger you should expect any reasonable bank to be extremely way of the latter.

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

#104

Post by forgetsusername »

cloakandswagger wrote: post #28
jonaf wrote: post #16

Earlier quoted context omitted.

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…

The downvotes on this comment are confusing. Do people dispute that a cashless society would be a dream come true for the US government & Fed? Or that the US will do pretty much anything to protect its currency hegemony?

>Do people dispute that a cashless society would be a dream come true for the US government & Fed?

For all intents and purposes we are already cashless.

But again, the government can't force you to use a specific medium for transactions, only what they will accept in taxes. If the system doesn't work for the people, the people will find away around it. That is guaranteed.

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

#105

Post by criley2 »

tyingq wrote: post #53
unreal37 wrote: post #40

Earlier quoted context omitted.

In fact they do. "Since 2011, PayPal has been required by the IRS to report the sales of goods and services for customers who, in a single year receive: More than $20,000 USD, AND 200 or more payments." [1] https://www.paypal.com/us/selfhelp/article/How-does-PayPal-r...

That is a significantly smaller subset than "all US customers and all US transactions". The point is that it's a fishing expedition.

Well sure, they don't need to fish in USD, but they do need to fish in bitcoin.

It is what it is, but if I dealt in bitcoin over that period of time, and my returns didn't reflect it, I would be talking to tax attorneys and filing amended returns BEFORE the IRS letters started, not after.

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

#106

Post by tracker1 »

trhway wrote: post #95
tracker1 wrote: post #87

Earlier quoted context omitted.

I've been postulating that a return to import/export taxes in addition to a small vat and include financial exchanges for import/export could be a better tax system with less bureaucracy than the current IRS. Not that I like the approach, but feel it would be better overall, have less gov't and be harder to work around.

>return to import/export taxes in addition to a small vat thus significantly slowing B2B and B2C markets. Why would we do it? It is like Middle Ages - one can consume only what is produced in the castle's vicinity and from every bucket of grain one has to give share to the lord and share to the church (note - the example is exactly vat, not income tax, as vat is taken as share of the total volume without regard to th…

Because B2B and B2C markets usually use BANKS as intermediaries for currency exchange anyway, so only the banks need to do it, and already have exchange provisions for fees, it would be easier to do there as a tax (additional fee). So instead of every individual responsible for filing taxes, only banks, and businesses do (which they already do as sales tax).

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

#107

Post by tn13 »

kchoudhu wrote: post #78
wheelerwj wrote: post #77

Earlier quoted context omitted.

Respectfully, you are incorrect or misinformed on many points. - coinbase is and has been a licensed MSB for several years, this means that it has already had to comply with all of the same BSA rules as every other bank. [1] - Banks don't have to report ANY transaction over $10,000. They have to report every CASH transaction (or aggregate of transactions) over $10,000 and any Suspicious transaction (or aggregate of t…

Coinbase is welcome to fight the breadth of the request, but they will lose -- if not this time, then the next. The government has every interest in regulating BTC out of existence: the ability to transact value with no government intermediation cuts to the core of what it means to be a nation state, and no state is ever going to renounce that monopoly.

> be a nation state, and no state is ever going to renounce that monopoly.

I agree that the politicians in Washington will fight back to continue their monopoly. How people transact in private life has however no implication on nation state. USA as a nation state and we as people would be significantly better if Fed stops the business of regulating currency and simply replaces old note with new ones.

The fight on BTC is something that US government is bound to lose because the rate of innovation here has already surpassed the rate at which the pen pushers in Washington can pass a bill.

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

#108

Post by tn13 »

jonaf wrote: post #16
ryaniscool wrote: post #5

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…

> I'm actually surprised the government showed their hand so soon.

Yes and in a very incompetent way. Coinbase will lose all credibility now if they don't challenge this in court. Coinbase is likely to win in the court increasing costs for IRS to do the same thing in future.

Secondly, despite the immense coercive power of US government this is a fight they are likely to lose badly in my opinion. The rate of innovation in currencies have reached well beyond the rate at which government can make sense and act on these things.

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

#109

Post by snark42 »

627467 wrote: post #86
emddudley wrote: post #61

Earlier quoted context omitted.

Purchasing something with bitcoin can trigger capital gains/loss. If you buy 1 BTC at $700, it increases to $800, and you pay 1 BTC for something worth $800, then you have to report and pay taxes on $100 capital gains.

May be unrelated... but what happens when I purchase goods with a foreign currency which I had bought before (and reported the purchase) and said foreign currency value had increased 15% since the moment I reported its purchase?

Technically you have to report and pay capital gains if the change in value is more than $200. In your case 15% gain is probably not more than $200 so you wouldn't have to report it. However if you're talking about $100,000 initial FX transaction you would have to report the $15,000 as a long or short term capital gain.

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

#110

Post by logfromblammo »

loeg wrote: post #102
logfromblammo wrote: post #90

Earlier quoted context omitted.

Spoken like someone who has never been penalized by the IRS. If you get a zealous agent, they will tack on anything even remotely plausible to nail you with. If you get an "it's a job" agent, they will do the minimum amount of work to process your file out of their inbox. The difference between the two can be thousands of dollars, not just hundreds.

It really depends on how you underpaid or underreported your taxes: https://en.wikipedia.org/wiki/IRS_penalties Note that you can only be penalized if you screwed up. If you've paid your taxes appropriately, there is no penalty. So yeah, to the best of my ability I've filed my taxes accurately and paid the amount due, and I've never had to pay an IRS penalty.

I have never been entirely convinced that I have neither screwed up somehow in filing US federal tax forms, nor paid the minimum possible amount in tax.

Even if I were to somehow correctly claim every applicable reduction, and keep all the necessary supporting documentation, I still couldn't be certain that some faceless IRS agent wouldn't later tax my time by arbitrarily making me defend my filings in detail.

Being objectively correct is not adequate defense against IRS penalties. If you have never had to pay one, it may just be because the IRS computer never (randomly?) spat out your number for further scrutiny by a human.

Post reply on HN