IRS Demands Identities of All US Coinbase Traders Over Three Year Period (vice.com)

An anonymous reader quotes a report from Motherboard: In bitcoin-related investigations, authorities will often follow the digital trail of an illegal transaction or suspicious user back to a specific account at a bitcoin trading company. From here, investigators will likely subpoena the company for records about that particular user, so they can then properly identify the person suspected of a crime. The Internal Revenue Service, however, has taken a different approach. Instead of asking for data relating to specific individuals suspected of a crime, it has demanded bitcoin trading site Coinbase to provide the identities of all of the firm's U.S. customers who made transactions over a three year period, because there is a chance they are avoiding paying taxes on their bitcoin reserves. Coinbase has a total of millions of customers. According to court filings, which were first flagged by financial blogger Zerohedge on Twitter, the IRS has launched an investigation to determine the correct amount of tax that those who use virtual currencies such as bitcoin are obligated to pay. But according to the documents, the IRS is asking for the identities of any U.S. Coinbase customer who transferred crypto-currency with the service between 2013 and 2015. "The John Does whose identities are sought by the summons are United States persons who, at any time during the period January 1, 2013, through December 31, 2015, conducted transactions in a convertible virtual currency," reads a memorandum written by Department of Justice attorneys and filed on Thursday, November 17.

Comments

I realize it's nit-picking

[93 Escort Wagon]

"Coinbase has a total of millions of customers."

This sentence really set off my annoyance sub-processor.

Re: I realize it's nit-picking

[Anonymous Coward]

It's not just you , that sentence really bugged me also. Maybe we are both picking nits.

Re:I realize it's nit-picking

[thegarbz]

That's easily fixed. Throw away the sub-processor and replace it with a co-processor. That way you can be annoyed more constantly without having to give things special consideration.

Re:I realize it's nit-picking

[Yvan256]

"Coinbase has a total of millions of customers."

This sentence really set off my annoyance sub-processor.

I'm pretty sure that's not an accurate value. It's probably "Coinbase has a total of millions of customers, plus or minus a couple of millions."

Re:I realize it's nit-picking

[93 Escort Wagon]

It's a win-win!

Get ready!

[Anonymous Coward]

The end is coming for shitcoin!

Not the first time they've done this

[Anonymous Coward]

"the IRS has launched an investigation to determine the correct amount of tax that those who use virtual currencies such as bitcoin are obligated to pay."

On a related note, back in 2004ish I was working for Starbucks while going to school. One day we were called to an off-site location (a church hall owned by his family) by the regional district manager to discuss an off the record situation. Apparently the IRS had contacted Starbucks and said if management in our region didn't start taking taxes out of everyone's tips per shift, the IRS was prepared to go back 5 years for every Starbuck's employee and garnish their wages according to what the Government "estimated" we had earned in tips. We were given the option to accept it or give our two weeks. Well since I was only making about 9 bucks an hour but 15+ dollars in tips because I worked my ass off every shift treating regulars right, that was the last straw for me and I walked away after almost 5 years of otherwise enjoyable employment. That day also left a very sour taste in the mouth, sobering me up to the reality that no matter who is in charge, the government will always be greedy and be willing to hurt the little guy to get what they think is owed.

Re:Not the first time they've done this

[Anonymous Coward]

Sounds like bullshit, but if it wasn't: Were you reporting your tips when you filed your taxes?

I reported the profitable sale of Bitcoin (that I had mined) in 2012 or 2013 or something. I reported it as "Sale of Bitcoin", I believe. I didn't try to deduct hardware or power costs used in mining.
A couple of years later I bought some more but ended up cashing everything out at a small net loss. I didn't report it as it was a net loss (I didn't try to deduct the loss either.)

I'm pretty "fuck the government" myself, but I still play by the (nebulous and stupid) rules. Assuming they win, I'm curious to see if the IRS tries to get at me for anything. It was very small scale and I actually paid my fair share in taxes, as far as I can tell.

Re:Not the first time they've done this

[reanjr]

So, you systematically evaded taxes for 5 years, and that makes you angry at the government?

Re:Not the first time they've done this

[slashrio]

Well, the government looks at it like this: Together the 99% are a very rich group from whom it can extract a huge amount in taxes. Even if the amounts per person are tiny, given there are enough people to go after, the 'rewards' will be great.
And an additional benefit is that they don't need to go after their rich friends, who gave them their positions.

Re:Not the first time they've done this

[NoNonAlphaCharsHere]

I recall the IRS doing something very similar in Nevada (Reno & Vegas) back in the early 80's; before gaming was a nationwide phenomenon -- even Atlantic City didn't have casinos in those days. Blackjack dealers were (overnight) told the amounts of tips they were "estimated" to have made, and that they would have to pay taxes on those estimated amounts. "The IRS deals seconds" (Google or YouTube "dealing seconds" if you don't know what that is) was their rallying cry. Ronald Reagan was president, and all the air traffic controllers were out of work. The more things change, the more they don't.

Re:Not the first time they've done this

[Anonymous Coward]

Were you reporting your tips when you filed your taxes?

With all due respect: fuck you, officer!

Re:Not the first time they've done this

[NoNonAlphaCharsHere]

Taxation is theft. He has every right to be angry at the government.

No. No it isn't. If you don't think so, keep off the roads, and keep your kids out of the schools the rest of us have paid for. Starve alone in the dark, you rugged individualist, you*.


*Unless, of course, you inherited enough money to not pay any taxes, like our Fuhrer-elect.

Re: Not the first time they've done this

[Anonymous Coward]

I doubt hell be starving, populist scum.

Re: Not the first time they've done this

[Anonymous Coward]

Yeah, I'm pretty sure hell wont be starving, with all the shit that's probably going to go down.

Re: Not the first time they've done this

[NoNonAlphaCharsHere]

I doubt hell [sic]be starving, populist scum.

LOL. Not real smart, are you, uneducated milinial scum, you just ELECTED a populist, didn't you? Hope ya' choke on it.

Re:Not the first time they've done this

[Jack9]

> Sounds like bullshit

Many people are having to subside on side hustles and tips if you're lucky. Sounds like you have no idea what being in the working class is like.

Re:Not the first time they've done this

[Anonymous Coward]

Putting "government" in front of it doesn't make it pure as the driven snow. Taking someone's money without consent is theft.

Your vision of it might be more likened to extortion - since they come around with the threat of overwhelming force and demand money. The sort of "group consent" conceits offered in defense of this practice (i.e. "social contract") are of dubious moral construct. Can one truly consent to entering into a lifelong agreement by mere fact of being born? And can such contracts be enforced by mere happenstance of geography?

To your material "we all paid for this stuff" complaints: There is a large movement to alter the public school model. It is viciously opposed by those of your political stripe. Apparently adding any sort of personal choice into the educational mix is tantamount to Armageddon.

And there are lots of anarchists, anarcho-capitalists and even some libertarians who have espoused private roads.

And somehow electricity, which is usually provided by a private company or a cooperative association has become a tax-supported government provision in your version of reality.

And although I am disdainful of Trump and voted against him in the election, I'll defend him against your infantile tirade at the end. It is silly to claim he somehow "inherited enough money to not pay any taxes"... it is completely unsupportable, even accepting the worst version of his opponents claims.

A more realistic rip would have been "Unless, of course, you lost enough money to not pay any taxes" .. because apparently he posted a capital loss that was so big that it outpaced his income for more than a decade to follow. That's a pretty amazing achievement right there.

So to sum up - your political knowledge is much more limited than you believe it to be. So is your knowledge of economic systems. And your criticism of Trump was infantile and wrong - which is particularly galling when there are so many fat and juicy targets for the picking.

Yes. This is a good place to insert the Billy Madison quote.

Re:Not the first time they've done this

[Archfeld]

Don't have kids, and the roads where I am from are paid for out of my vehicle registration. I pay income tax, sales tax, government fees on my utilities that I pay for up front out of the money I already paid withholding taxes on, sounds like some serious double and triple taxation or outright theft.

Re:Not the first time they've done this

[TFAFalcon]

How is it theft? Taxation is defined by law. If you think laws don't affect you, then the laws about property also don't exist, so you don't own whatever they are taking from you.

Re:Not the first time they've done this

[BlueStrat]

Taxation is defined by law.

So was slavery at one time, so were the horrors perpetrated in WW2 Germany, so were separate drinking fountains for whites and blacks. All legal, compulsory even, in many circumstances. Holding women as chattel is also legal in places in the ME, as is killing homosexuals.

I guess being legal makes anything OK then, right?

Or is it only as long as the laws comport with *your* views and biases?

Strat

Re:Not the first time they've done this

[GNious]

Whether something is "OK" and whether it is "illegal" are 2 different topics - the one at hand is whether Taxation is Theft, i.e. whether it is illegal - it isn't.

Re:Not the first time they've done this

[BlueStrat]

Whether something is "OK" and whether it is "illegal" are 2 different topics - the one at hand is whether Taxation is Theft, i.e. whether it is illegal - it isn't.

Wrong.

Theft can be legal or illegal, it's still theft. In WW2 Germany the jews had their wealth, property, and businesses stolen. It was theft. It was technically legal under the existing laws, but it was still theft.

The same as the genocide in WW2 Germany. It was legal, but it was still genocide.

Legal status does not make something right or wrong or change what it is. It simply allows or forbids it under the legal system.

Taxation IS theft, it simply happens to currently (and temporarily) be legal in the US. That legality can (and should, for a free people) be changed.

Strat

Re: Not the first time they've done this

[Anonymous Coward]

You just disagreed with the gp, then in your post went to great lengths to explain how you actually agreed with it.

Re: Not the first time they've done this

[Anonymous Coward]

You just disagreed with the gp, then in your post went to great lengths to explain how you actually agreed with it.

No, he didn't. OP said taxes were not theft because they're legal. He responded that theft is theft regardless of whether or not the specific laws in that place allow it.

Reading comprehension, motherfucker! Do you have it?

Re:Not the first time they've done this

[TFAFalcon]

The definition of theft is "an unlawful taking (as by embezzlement or burglary) of property". So no, just because you think taxation is wrong does not make it theft. If there is a law allowing it, then it is not unlawful. Therefore it is not theft.

Re: Not the first time they've done this

[Anonymous Coward]

Why, exactly, is "populist" an insult?

Re:Not the first time they've done this

[stephenmac7]

Whatever you want to call it, it's obviously taking someone else's rightfully owned property without their permission. They (or someone who gave it to them willingly) have produced something of value and earned that wealth. To take it is wrong-- lawful or not.

The great German sociologist Franz Oppenheimer pointed out that there are two mutually exclusive ways of acquiring wealth; one, the above way of production and exchange, he called the "economic means." The other way is simpler in that it does not require productivity; it is the way of seizure of another's goods or services by the use of force and violence. This is the method of one-sided confiscation, of theft of the property of others. This is the method which Oppenheimer termed "the political means" to wealth. It should be clear that the peaceful use of reason and energy in production is the "natural" path for man: the means for his survival and prosperity on this earth. It should be equally clear that the coercive, exploitative means is contrary to natural law; it is parasitic, for instead of adding to production, it subtracts from it. The "political means" siphons production off to a parasitic and destructive individual or group; and this siphoning not only subtracts from the number producing, but also lowers the producer's incentive to produce beyond his own subsistence. In the long run, the robber destroys his own subsistence by dwindling or eliminating the source of his own supply. But not only that; even in the short-run, the predator is acting contrary to his own true nature as a man.

Re:Not the first time they've done this

[Anonymous Coward]

The definition of theft is "an unlawful taking (as by embezzlement or burglary) of property". So no, just because you think taxation is wrong does not make it theft. If there is a law allowing it, then it is not unlawful. Therefore it is not theft.

Just like it's not rape if a Clinton does it, as the law does not apply to a Clinton.

Right?

Re:Not the first time they've done this

[Anonymous Coward]

Taxation is theft. He has every right to be angry at the government.

No. No it isn't. If you don't think so, keep off the roads, and keep your kids out of the schools the rest of us have paid for.

Actually, Yes. Yes it is. Theft is theft regardless of what the thieves spend the money on or what their co-conspirators think. Theft is the seizing of a person's rightful property against their will.

You might argue that the money that a person earns is not their rightful property (and when it comes to that leverage special government privileges to make money or suppress competition you'd have a good point) but to argue that taxation is not theft simply because some of the money is spent on roads is so obviously wrong I wonder at your intentions. Could it be that the simple truth of the matter so upsets your world view that you can do little more than bury your own head in sand?

Re:Not the first time they've done this

[sexconker]

So you believe the bit about pulling people to a offsite location and telling them the IRS is going to go back on THEIR tax records 5 years to garnish some imagined top wages that may or may not have already been reported, and somehow quitting would solve it?

I wouldn't put it past a shitty manager to say that kind of shit, even off the record, but no one with a brain would believe it.

Re:Not the first time they've done this

[Anonymous Coward]

first, "bitcoin isn't a currency", right?

now it is?

wait a minute.

why the fuck are they taxing your overseas transactions?

Re:Not the first time they've done this

[Anonymous Coward]

Tru dat. You volunteer to live in a "gated community" named [Your Country]. Your gated community has monthly fees to cover security and maintenance of common areas. You're allowed to participate in the community management board either by voting or running for open spots. By contract, the residents have delegated to the management board the right to levy fees for community projects. If you don't like how the management board is working, and don't want to influence its decisions through the contractually-defined process, you're free to sell property and move elsewhere.

Re:Not the first time they've done this

[Anonymous Coward]

You're going so fast you've gone right past reality without slowing down.

https://yro.slashdot.org/comme...

Re:Not the first time they've done this

[Anonymous Coward]

Except you never consented to the contract. You were born. That is all.

This a very dubious construct for a contract. By accident of birth location you are obligated to a contract that can be altered by the other party at any time, and cannot be exited without great difficulty. (not only would you have to move thousands of miles, you'd have to find another country willing to take you in, and the US has been making it more and more difficult to renounce your citizenship - because they are trying to hold on to those high income earners and high net worth individuals who have been fleeing to lower tax jurisdictions)

The HOA model really breaks down pretty quickly, as the HOA contract applies to property, not persons. It also is in existence from the construction of the neighborhood, so every homeowner went in to the deal with the terms of the contract in hand. And the exit fee is normally simply finding a willing buyer. Or you could walk away from your investment, I suppose.

As a Canadian, you are subject to all of the laws and taxes of Canada from birth, no matter what. Travelers and immigrants have a chance to consent to the deal, but natives don't. They can attempt to get out of the deal, but it isn't so simple as moving to another neighborhood .

Re:Not the first time they've done this

[Anonymous Coward]

Understanding "Law" only if the positive formal sense is a failure of imagination and understanding. Even if formal systems fall away, custom remains, as does the desire to avoid conflict. The biggest problem with formal, monopolistic system of law, that the issuing agencies (Mainly States, and some other organized crime groups) substantially exempt themselves their laws. For instance it is common for them to define the crime of theft as "The willful taking of another property with the intent to deprive him of such property, without lawful authority". And lawful authority mainly being the permission legislators they give to themselves and their agents to do exactly the same things that criminals do , to exactly the same people. Even if the tax is not theft in the strictest technical and positive sense, it is nonetheless substantially the same.

Re:Not the first time they've done this

[UnknownSoldier]

> Except you never consented to the contract. You were born. That is all.

That's false.

The contract IS the Socialist Slave Number, or Slave Identification Number.

In the US there is NO law that requires a person to have one.

The Social Security Act does not require a person to have a Social Security Number (SSN) to live and and work in the United states, nor does it require an SSN simply for the purposes of having one.

-- Response from SSA to Mr. Scott McDonald, March 18, 1998 from Charles Mullen, Associate Commissioner, Office of Public Inquiries, SSA

Re:Not the first time they've done this

[Anonymous Coward]

Doesn't matter. The government has the lawyers and the heavily armed law enforcement to back them up.

You have bupkus unless you are one of those RWNJ who live out in the sticks with dogs, generators, and shotguns.

Re:Not the first time they've done this

[Anonymous Coward]

I'm in the process of a full audit by the IRS. Guess I'm more like Trump than I'd admit, except I'm not hiding my income. I actually report all my income, and don't make up bs deductions. But it will still take me weeks to prepare all my receipts by category.

This is my 4th audit. I got money back from the first 2, and was even on my 3rd. I'm hoping for money back again...but with my time factored in, it still costs me money.

Re:Not the first time they've done this

[Anonymous Coward]

Doesn't matter. The government has the lawyers and the heavily armed law enforcement to back them up.

You have bupkus unless you are one of those RWNJ who live out in the sticks with dogs, generators, and shotguns.

Or, simply choose not to start that business...make those investments...pursue the idea for that invention...take that good-paying job...or otherwise choose to generate any significant taxable income. Some call it "going Galt". It's not illegal for somebody who *could* do those things listed above to choose *not* to pursue them.

Good luck taxing/seizing potential income/wealth that was never generated. Unless, of course, you'd like to bring back slavery? No? Then the taxman is out of luck, sorry.

Fishing Expedition

[gavron]

Coinbase should be able to get this quashed.

If the IRS had evidence of a crime, they're allowed to get information to further identify the person who committed it.

If Coinbase had committed a crime, they're allowed to get information as to who else was involved in it.

However, to subpoena a list of all clients in a certain geographical area over a three year period is to presume them guilty and then look for the innocent. That's a classic fishing expedition, and the courts should disallow it.

I am not a lawyer. Consult lawyers for legal advice. This is simple common sense.

E
P.S. I know the IRS is powerful... but not ALL powerful.

Re:Fishing Expedition

[Anonymous Coward]

You seem confused, you don't need evidence of a crime. With companies that deal as money exchanges they have a legal obligation to record the details of all financial transactions and those need to be made available to the government with a legal request, this doesn't actually require proof of crime with a tax investigation.

Re:Fishing Expedition

[ShanghaiBill]

It is not that simple. The IRS request is not a subpoena, it is an an administrative demand for information. They are not (yet) investigating a crime, but ensuring tax compliance. Your rights during a tax audit are not the same as your rights in criminal court. I hope Coinbase can stop this disclosure, but I am not optimistic. If the IRS prevails, then we should expect most bitcoin transactions to move offshore.

Re:Fishing Expedition

[rtb61]

In the even of a search warrant they will not be issuing it against the individuals whose records are being stored but against the records of the company storing those coins and records. When banks get audited those audits include the records of all of their customers because that is what is being audited the interactions between the bank and it's customers. So for those cheating, take you imaginary money and run because make no mistake the IRS is coming for you and you will be no happy to see them. You could of course always deny that imaginary money is yours and simply walk away from it, claiming the imaginary coin company service made in all up but you have to give up all your imaginary money. PS offshore tax havens will not be the save haven of crime and corruption they used to be, they are powerful social forces building to gut them open and put the juicy bits on public display, not by hackers but by various investigatory agencies (apparently legalised hackers) demanding justice and rule of law. No matter how high the target of their investigations, corruption really, really stretched the justice rubber band and it is going to snap back hard, real hard, youch ( a lot of really surprising people are going to end up behind bars).

Re:Fishing Expedition

[Anonymous Coward]

You were modded Funny because you imply that the IRS needs to comply with laws or the Constitution.

Are you new here? A refugee from Syria perhaps, or someplace similar with a functioning rule of law?

Re:Fishing Expedition

[PPH]

it is an an administrative demand for information. They are not (yet) investigating a crime, but ensuring tax compliance.

The police kicked in my door. The assured me that they were not executing a search warrant, but conducting an administrative audit to ensure compliance with the law.

Re:Fishing Expedition

[whoever57]

PS offshore tax havens will not be the save haven of crime and corruption they used to be, they are powerful social forces building to gut them open and put the juicy bits on public display, not by hackers but by various investigatory agencies (apparently legalised hackers) demanding justice and rule of law.

Really? Perhaps there are actions against offshore tax havens now, but I don't expect much investigatory action during the next 4 years.

Re:Fishing Expedition

[Anonymous Coward]

apples and oranges. The IRS and Tax Audits are not governed by the same laws as police and search warrants. You do not have a right of innocent until proven guilty with a Tax audit, quite often it is actually the reverse.

Re:Fishing Expedition

[Anonymous Coward]

HAHAHAHA as if trump being prez is going to change an IRS mandate HAHAHAHAHA

Re:Fishing Expedition

[PPH]

Tax Audits are not governed by the same laws as police and search warrants.

US Constitution, Fourth Amendment.

You can't just change the terminology to step around the rule of law.

Re:Fishing Expedition

[Anonymous Coward]

This only works if you convert from USD to BitCoin and vice versa. It's easy to spend BitCoin if you take BitCoin. The biggest issue right now is that businesses tend to utilize middlemen which are going to fold to the IRS. However it doesn't have to be that way. Now the IRS could do a reverse audit if you are clearly spending way more money then you make, but that's extraordinarily rare.

In New Hampshire there are lots of places to spend BitCoin. I pay my auto insurance in BitCoin (it's actually not requirement to have auto coverage, but I do, as you are still liable even if you don't have converge), I pay my car repair bills in BitCoin, I buy lunch in BitCoin. I know friends who receive their entire paychecks in BitcCoin, pay rent in BitCoin, and so on. I actually know someone who bought a house with BitCoin. If you want to avoid the IRS just move up to New Hampshire cause it's really easy here to avoid reporting anything to the IRS here.

The reason New Hampshire rocks is because of the Free State Project and the migration of 20,000 liberty-activists to the state. NH was already better than average in terms of freedom, but it's getting better with free staters now getting elected to all levels of state and local government. One day we won't even be required to register vehicles, get drivers licenses, etc. There are a surprising number of people here who don't pay taxes, don't have valid drivers licenses (they risk arrest, but cops will release you almost immediately, apparently), and have out-of-state registered vehicles (Colorado I believe has one time registration so you can get a Colorado license plate).

Re:Fishing Expedition

[ShanghaiBill]

The police kicked in my door. The assured me that they were not executing a search warrant, but conducting an administrative audit

The IRS are not "the police". The police must respect the rights of citizens under the 4th Amendment. The IRS has greater powers because of the 16th Amendment. "The right of the people to be secure in their persons, houses, papers, and effects" does not include records that document financial transactions.

I am not saying this is the way it "should be", I am just pointing out that this is the way it "is". There is no fair and efficient way to enforce an income tax without the government prying into every nook and cranny of our lives.

Re:Fishing Expedition

[Anonymous Coward]

Sounds like how NH operates for property tax purposes. You can refuse them entrance, but then they'll value your shack at a million dollars. For whatever reason NH didn't do that to me. They simply sent me a letter saying they were going to show up, but then never did. They valued my house around what it very recently had sold for. I had wanted to refuse them entry, but never got the chance. I probably was going to fold though this time. Mainly because I didn't feel like fighting such a big battle given that I have yet-to-fight-the-little-legal-battles. Though I know a lot of people around me that have fought small and big battles all the way up to taking a case to trial that would have possibly resulted in a 99 year sentence for pot (or something like that, might have had a harder drug on them than that now I think about it, or maybe it was for dealing, but in any event they half-won, only ended up serving a year in jail, which was better than what the plea deal was, which was to rat on fellow activists and friends).

Re:Fishing Expedition

[slashrio]

You could of course always deny that imaginary money is yours and simply walk away from it, claiming the imaginary coin company service made in all up but you have to give up all your imaginary money.

Not true.
You can keep the coins in your wallet and keep your wallet.
However, if the coin company has documented proof of your transaction requests, it will be very difficult to deny that the coin purchased with the money from your cheque and with the proper bitcoin address isn't yours.
You may get away with not showing or opening your wallet with that coin, but I doubt you can escape the IRS' claim for unpaid taxes.

Re:Fishing Expedition

[j-beda]

It is not that simple. The IRS request is not a subpoena, it is an an administrative demand for information. They are not (yet) investigating a crime, but ensuring tax compliance. Your rights during a tax audit are not the same as your rights in criminal court. I hope Coinbase can stop this disclosure, but I am not optimistic. If the IRS prevails, then we should expect most bitcoin transactions to move offshore.

Perhaps, but the IRS has pretty long arms. Over the past few years they have been enforcing pretty heavy reporting requirements on financial instutions all over the world who deal with "USA Persons". They have been able to force foreign institutions to follow their rules by exterting pressure on the USA business dealings that those institutions might have. This can be a pretty powerful incentive. Many institutions deal with this by refusing to do business with any "USA Person", which can make it a royal pain in the ass to open a bank account if you happen to live somewhere other than the USA. Becoming a non-citizen is not very easy, and can be fairly expensive - http://www.theglobeandmail.com...

Here is a bit of info from the Canadian Bankers Association:
http://www.cba.ca/fatca-and-th...
"The Foreign Account Tax Compliance Act (FATCA) is legislation passed in the United States in 2010. FATCA is intended to detect "U.S. persons" who are evading U.S. tax using financial accounts held outside of the United States. Under FATCA, non-U.S. financial institutions are required to report relevant information to the U.S. tax authorities, the Internal Revenue Service (IRS), about financial accounts held by identified U.S. persons. If a non-U.S. financial institution does not comply with FATCA, the IRS can impose a 30 per cent withholding tax on U.S. source payments paid to the financial institution or its clients."

Re:Fishing Expedition

[PPH]

16th Amendment

Nothing in there about an exemption from the 4th Amendment. The 16th Amendment simply allows the gov't to levy taxes based on something other than a flat fee per person (the original power defined in the Constitution).

Re:Fishing Expedition

[Anonymous Coward]

Exactly. If Coinbase refused to provide the data, THEN they would very likely be charged with assisting money laundering. Anyone who worked in any financial institute would know this.

i.e. IRS don't need Coinbase to commit a crime to ask for this data, but Coinbase would have committed a crime by refusing.

Re:Fishing Expedition

[ShanghaiBill]

Nothing in there about an exemption from the 4th Amendment.

If the IRS can only request documentation and audit people when they have probable cause that a crime has been committed (as the 4th Amendment requires), then compliance will fall to near zero. Employers will no longer be required to submit W2s or 1099s, and citizens will no longer file returns.

Re:Fishing Expedition

[msauve]

"The right of the people to be secure in their persons, houses, papers, and effects" does not include records that document financial transactions.

Because some bureaucrat says "records" are not "papers or effects?" Or because there's "no expectation of privacy," even though there are explicit written privacy contracts between the parties? If a court goes along with such bullshit, the King has no clothes. The end does not justify the means, and it's better than one person gets away with something than that millions have their rights violated.

Re:Fishing Expedition

[ShanghaiBill]

US Constitution, Fourth Amendment.

Keep reading. Let us know when you get to #16.

You can't just change the terminology to step around the rule of law.

No, but you can amend the Constitution.

Re:Fishing Expedition

[ShanghaiBill]

Because some bureaucrat says "records" are not "papers or effects?"

If by "some bureaucrat" you 75% of the state legislatures and the Supreme Court of the United States, then yes.

The end does not justify the means, and it's better than one person gets away with something than that millions have their rights violated.

Just tell that to the IRS on April 15th when they demand your tax return. Good luck.

Re:Fishing Expedition

[Cytotoxic]

US Constitution, Fourth Amendment.

Keep reading. Let us know when you get to #16.

So, let's see what it says.

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

So they can levy an income tax. And they don't have to give any of it to the states. And they don't have to worry about any head counts. But there's nothing in there about exemptions from 4th amendment protections.

So let's take a look at that 4th amendment:

"The right of the people to be secure in their persons, houses, papers, and effects,[a] against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.[2]"

So if you wanna demand access to someone's person, house, papers or effects, you gotta show probable cause which is supported by Oath or affirmation and describing a particular place to be searched and the particular person or thing to be seized. And no, shoving "income tax enforcement" in front of the request doesn't seem to be a reasonable substitute.

But you are right in that the government has repeatedly exempted itself from having to follow the constitution - on this particular issue and many others. And by that I mean in all likelihood they'll be turning over the info the government wants.

Re:Fishing Expedition

[PPH]

then compliance will fall to near zero

So the income tax system we have is unsustainable unless everyone's rights are violated. Time to shut it down and come up with something else.

Hint: Forming a corporation is conditional upon filing an application with the appropriate governing entity. That entity can place any legal preconditions on approval of that application. Including a requirement to submit financial records to taxing authorities. So tax corporations. Either gross revenue or profits or whatever combination works best. No rights are lost because people can simply choose to do business as sole proprietors.

Re:Fishing Expedition

[ShanghaiBill]

Hint: Forming a corporation is ... blah blah blah

Most businesses are not corporations. If an individual citizen employs other individual citizens they are required to file the same forms as a corporation. Tax compliance has nothing to do with "incorporation".

Re:Fishing Expedition

[roman_mir]

The IRS has greater powers because of the 16th Amendment

- actually not because of any amendment, the IRS has its powers because the government decided it wants your money, not due to any amendments.

Re:Fishing Expedition

[msauve]

There's a rather large difference between being required to file paperwork and the government simply taking it.

Re:Fishing Expedition

[Anonymous Coward]

Everything is up to make it up as you go now that Abortion rights are no longer respected as far as supreme court decisions are concerned.
Why would anything else be?

Were so fucking doomed.

The solution to taxes is barter.

Bit coin without dollar value would be better idea. Cant be exchanged for money only products and services. everyone gets 100 to start.

Re:Fishing Expedition

[Anonymous Coward]

The 4th Amendment says nothing about police. The police and the IRS are both intruments of the government. The United States Constitution is a contract between the government and the citizens it governs over. Any government agent (IRS, police, postal worker, etc) should be bound by the rules provided in the United States Constitution.

Of course, these days, the gov't walks all over the Constitution like it was toilet paper. And instead of fighting for their rights, most citizens these days just let them get away with it.

Re:Fishing Expedition

[anegg]

The government needs money in order to carry out its duties. We can argue about what those duties are, and how much money it needs, and we should, but we can't pretend it doesn't cost money.

If the government is going to acquire money to pay for the government, it can do so using a few different models (assuming the collection will be under the color of law, and based on some rational rules, not just tax collectors riding door-to-door taking whatever they want): a) take a percentage of money as it comes into the possession of an entity, b) take a percentage of money as an entity pays it out to obtain goods and services, c) take a percentage of the value of all goods owned by the entity, or d) divide up all the costs among all entities and charge them each accordingly. Our shorthand for these things are a) income tax, b) sales tax, c) property tax, and d) per-capita tax. The entities may be individuals, or they may be corporations.

Not surprisingly, we have found that each of these models for funding the government has pros and cons, with folks managing to figure out how to game the system under each model in their own economic self-interest, which might then appear to others as them shirking their responsibility to share the cost of government.

I happen to live in a state that decided to *not* have an income tax; this sounds very attractive if you have a decent income that you would like to personally keep more of to yourself. (No worries about taxing tips, either). However, the state government still needs $$ to operate. So... we have a slightly higher property tax (on "real property" (i.e., houses)); a higher sales tax, which includes both a state component, a county component, and a local component; a business and occupation tax based on company *revenue*, not profit; and don't even get me started about the extra taxes on liquor that have us paying close to 50% more on such things than in the state I lived in just prior to this one. Am I coming out ahead with no income tax? Beats me... it depends on how much I buy in goods and services, how nice of a house I have, and how much I like to drink. So I can have a decent income, and pay no income taxes, but if I spend my $$ on anything, I pay more than I might in other jurisdictions for each of those things. The government gets its money through the "corporations", but the corporations get their money though individuals.

When you suggest taxing corporations, which are the legal way of treating a body of people as one entity, and which are used primarily by organizations that provide goods and services to people, you are just changing the model under which the government is being funded, you are most emphatically *not* reducing the amount of money that the government costs. No matter what model is used, the government will set the rates used so that it gets the money needed to fund its operation. And that money will ultimately be paid out of the pockets of individuals, either directly or through corporations. Changing the model may be warranted, and may result in a more or less fair distribution of government costs to individuals (depending on your definition of fair), but it won't eliminate people gaming the system, and it won't eliminate complaints about fairness.

Re:Fishing Expedition

[Anonymous Coward]

True, but he's proposing something based on a different set of beliefs on how things should work such that they would be ethical and in compliance with the constitution from his perspective.

Re:Fishing Expedition

[Anonymous Coward]

We could also just discontinue near all government services and potentially select particular high-profit activities the government could monopolize that might make sense such as resource extraction to funnel funds to government to cover the absolute essentials (a small military cache). That would result in no government social programs including schools, etc. You could probably still cover major roads even within this model as they make up only a tiny fraction of taxes collected.

Re:Fishing Expedition

[Anonymous Coward]

There is no fair and efficient way to enforce an income tax without the government prying into every nook and cranny of our lives.

Of course. The very concept of income tax is unfair on its face. Citing potential tax evasion as an excuse to invade privacy en masse is just icing.

Re:Fishing Expedition

[sexconker]

Abortion rights

Where are those enumerated? They aren't.

What you have is protection from the state digging around for evidence that you had an abortion because the state's interest in protecting a fetus doesn't let it violate the constitution.

The media and fools like you like to frame it as "abortion rights" because abortion is a divisive issue. By letting them chip away at "abortion right", about half of the country will support you (and more than half if you do it gradually enough). The real effect is that it chips away at the constitution, and your protections against the government in general. That's FAR more serious than "abortion rights".

Re:Fishing Expedition

[Anonymous Coward]

You are an idiot.

4th amendment, the right to be secure in your persons, houses, **papers**...

hint: if you're a sole proprietor, you are actually treated differently under the law, for your "business" records.

the corporation LOOPHOLE, is an illegal attempt to get around that fourth amendment requirement.

Re:Fishing Expedition

[Anonymous Coward]

You seem to be forgetting the fact that later amendments take precedence over earlier ones (otherwise, alcohol would be in a superposition of 'legal' and 'illegal'), so anything allowed/banned by the 16th can't be contradicted by any earlier amendments. Last I checked, 16 > 4.

Re:Fishing Expedition

[Anonymous Coward]

Amendment IX
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

If you try to deny that rights exist by asking if they're enumerated, you're just demonstrating that you aren't familiar with the Constitution. Its pretty pathetic to try making that argument when the freaking Bill of Rights shoot it down in plain English over 200 years ago.

because there is a chance they are avoiding payin

[frovingslosh]

because there is a chance they are avoiding paying taxes on their bitcoin reserves

What exactly is the federal tax on "bitcoin reserves"???? If you have cash money that you keep in reserve, there is no tax on it (assuming that you paid income tax on the original income). If there is actually no tax on "bitcoin reserves" as I believe, then this is an invasive fishing scam that improperly puts these bitcoin users in the position of being investigated just because they used Coinbase.

Morality

[Rockoon]

The left wants to raise taxes because they think it will increase tax revenue.
The right wants to lower taxes because they think it will increase tax revenue.

When the hell did it become moral for a government to maximize tax revenue?

Its down right evil.

Re:Morality

[Aereus]

When the people want more services than tax revenues can provide in any given year and have ran a substantial budget deficit for well over a decade?

Re:Morality

[Anonymous Coward]

So- it's morally justified to have the government steal for you? Sorry- that's not moral. That's wrong. There is something called charity and you can't justify stealing just because you voted for it.

Re:Morality

[slashrio]

"We the people.." didn't ask for services in the constitution, and even denied the federal government to levy income tax.

Re: Morality

[Anonymous Coward]

Then invent a time machine and go live before 1789.

Re:Morality

[mysidia]

Well... it's happened, and if you want it to stop, then a constitutional amendment will be required.

I would suggest....

Congress shall pass no law disbursing government-controlled money, assets, or collected taxes in the form of money, goods, or services to any person or entity, except in the form of a refund or rebate available to all citizens as a proportion to the amount of taxes collected from that person, or as necessary to support common good services beneficial to a majority of citizens and offered on an equal basis to all citizens with no wealth, income, location, field of endeavor, or means test; when a funded common good is service moneys provided for cultural products, scientific research, enrichment, or academics, all products, observations, complete datasets, designs, source code, notes, engineering results, analysis, pictures, multimedia productions, test data, and other final and intermediary results of that work shall be Non-patentable, Non-copyrightable, and shall be preserved and made available to the public and at no cost higher than the cost of archiving.

Any act or law already existing or that may be passed in the future which does not comply with these limitations shall be null and void, and in its entirety, not just the article or section in conflict, but always each entire law or act of congress is invalidated.

Re:Morality

[LeftCoastThinker]

No, what is evil is running the federal government on a $10 trillion dollar deficit over the last 7 years that future generations will have to pay for in order to buy votes with social programs like health care, welfare and food stamps.

And to be clear, the right wants smaller, less intrusive government with minimal safety nets for those who truly have to have it. This means less taxes because the government is smaller. If that boost of 2-3% extra into the economy also increases the total economic growth rate dramatically, and therefore boosts net tax income (which happened under Regan), that's fine, but that is not the goal.

The left wants to tax everything to the max so that they can buy votes with their various failed social programs and experiments.

Wait, I thought they didn't think it was money?

[wierd_w]

Oh, right, its property now, right IRS?

https://www.irs.gov/uac/newsro...

Because they have a mandate to manage property that is not theirs, obtained with currency.. I mean, "property" that was not created or backed by the federal reserve bank, and no matter what nation if extraction the individuals involved in the exchange of property are from, they need to perform excise on it, right?

So, I need to declare when I give property to another person on my W2. Such as when I give a Christmas present, or give blankets and coats to starving families.

Obviously this is rational, and essential for proper governance.

Re:Wait, I thought they didn't think it was money?

[perpenso]

So, I need to declare when I give property to another person on my W2.

Well, yes, but not on the W2.

Who pays the gift tax?
The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

What is considered a gift?
Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

What can be excluded from gifts?
The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.
Gifts that are not more than the annual exclusion for the calendar year.
Tuition or medical expenses you pay for someone (the educational and medical exclusions).
Gifts to your spouse.
Gifts to a political organization for its use.

https://www.irs.gov/businesses...

Re:Wait, I thought they didn't think it was money?

[Anonymous Coward]

Barter is taxable. Gifts are not.

Re:Wait, I thought they didn't think it was money?

[Anonymous Coward]

Not true. You can give someone up to 13k in gifts per year. After that it becomes taxable.

Boy, this government needs MORE money and power

[Anonymous Coward]

Yep, our government has shown it not only needs more money and more power to make all our lives better, it's also shown that's it's a responsible government and won't abuse that power.

So PAY YOUR FAIR SHARE!!!!!

All that extra money and power won't be used against you.

Our wonderful government PROMISES!!!!

Re:Boy, this government needs MORE money and power

[Anonymous Coward]

Where did you think the money was going to come from to pay for the Healthcare credits?

Just because the government says it is free does not mean that we are not paying for it.

Remember when people said Bitcoin was anonymous?

[Sowelu]

And that that was one of the main benefits of using it? I was always confused how on earth that was supposed to work. Comforting to see that the answer is apparently "it doesn't".

Not taxing reserves, looking for gains or income

[perpenso]

They are not taxing your reserves. They seem to be looking for (a) people who traded in bitcoins but didn't report the gain/loss and (b) people who sold goods/services and were paid in bitcoins but didn't report the income.

Re:Remember when people said Bitcoin was anonymous

[sexconker]

Bitcoin is as anonymous as you want it to be.
Exchanging it for fiat currency isn't.

Search Warrants ...

[Anonymous Coward]

... must be based on probable cause, be reasonable and specific according to the Fourth Amendment. Unfortunately, the IRS operates beyond the authority of the law.

Play stupid games, win stupid prizes

[Anonymous Coward]

Money laundering with magical internet money is still money laundering.

Even if you're not trying to cheat, perhaps you should think twice about putting some form of money in to a completely unsecured and untested financial institution. At least with a traditional institution you'd know where you stood and the IRS would have to follow some guidelines and would not have grounds for a blanket information pull.

Given that these joker outfits that call themselves exchanges keep getting hacked ever other week, getting worked over by the IRS is probably the least of your worries.

Re:Play stupid games, win stupid prizes

[khallow]

Given that these joker outfits that call themselves exchanges keep getting hacked ever other week

Well, say they get hacked every other week. I think this is quite the learning experience for those who pay attention.

KIM DOT COM

[Anonymous Coward]

Let me put my tinfoil hat on. They're going after Kim Dotcom again. He announced a while back that he would be using his mega service to mine bitcoins.

Saw that coming ...

[CaptainDork]

When bitcoin hit the scene years ago, I said that it was currency.

Got a lot of flack for that.

Then I said that as soon as it could be converted to real cash, it would be regulated.

I was wrong on the timing, but bitcoin is going to be another Paypal.

Re: because there is a chance they are avoiding pa

[reanjr]

According to Intuit, profit from selling BTC is taxed like income, holding BTC which is increasing in value is taxed as capital gains, and "earning" BTC through mining is taxed as revenue which can be offset by mining costs: https://turbotax.intuit.com/ta...

Re:Remember when people said Bitcoin was anonymous

[Anonymous Coward]

This is why I spend my BitCoin. No need to convert it to USD. But I live in one of the most BitCoin friendly places on earth: New Hampshire. Thanks to the Free State Project which is a migration of liberty-minded individuals to New Hampshire I have lots of places to spend it. Rent, car insurance, lunch (many restaurants around here accept it), paying employees (actually have one employee who gets his full paycheck this way), etc

Re: because there is a chance they are avoiding pa

[Anonymous Coward]

holding BTC which is increasing in value is taxed as capital gains ...and like any other investment subject to taxation as capital gains, the tax isn't owed until the asset is sold and the gain is realized.

Glad I paid my capital gains taxes!

[Anonymous Coward]

I declared my bitcoin profits on my tax return as short term capital gains so I'm covered.

Sucks to be one of the suckers who thought they were gonna pull a fast one. The writing was on the wall for anyone who cared to look.

Re:Not taxing reserves, looking for gains or incom

[frovingslosh]

But the specific excuse for doing this mentioned reserves. They might as well just admit that they are on a fishing expedition.

You got what you asked for

[Anonymous Coward]

Remember the posts that keep saying Bitcoin is currency no different from your greenbacks? Now you got what you asked for.

Any normal company that deals with currency already have to report their transactions to IRS, now all you BC promoters should rejoice that IRS is treating Bitcoin like a currency.

No Problem

[BlueStrat]

Just hack into the IRS and erase their database and wipe out all records. Seeing how easily the OPM was hacked, this should not be that hard for a talented group.

If the IRS wants to operate outside the US Constitution and Rule of Law, then they abrogate the right to any protections provided under the law and are fair game.

Strat

Re: because there is a chance they are avoiding pa

[Anonymous Coward]

Surely CGT only applies to the holding once you sell it? Here in NZ this is the case. It appears that tax is payable (profit) or refundable (loss) at the point that you convert the "coin" to actual cash-based currency. I've always thought that Bitcoin, and all the other virtual currencies that are generated from effort, are much like growing vegetables or rearing chickens for eggs that you'd then sell at the markets or to distributors. You'd pay tax once you received cash for the effort you put into the resource. Certainly the cost of vegetables and eggs has increased substantially over the years, as has everything, and so you'd be paying more tax for the greater income just like Bitcoin increasing in cash value at the point that you sell it.

And actual example from my own experiences has been exchanging my IT knowledge to repair a laptop for a mechanic friend and in exchange he serviced my car. I incurred some time cost an he incurred some time and materials cost but it didn't go on the books.

Am I completely wrong about this?

Re:Remember when people said Bitcoin was anonymous

[110010001000]

Who said Bitcoin was anonymous? If you read the FAQ that is the third question. No one knowledgeable ever said Bitcoin was anonymous.

Re:Not taxing reserves, looking for gains or incom

[perpenso]

But the specific excuse for doing this mentioned reserves. They might as well just admit that they are on a fishing expedition.

The slashdot summary phrases things as "reserves". The actually court document introduction focuses on tax avoidance.
"The IRS is responsible for monitoring ways in which United States taxpayers evade their United States tax obligations by concealing or otherwise failing to report their proper amount of taxable income and thus underpay their taxes ... In order to identify taxpayers who have may have underpaid taxes associated with transactions in virtual currency, the United States brings this ex parte proceeding under 7609(f) and (h) of the Internal Revenue Code (26 U.S.C.) for leave to serve a John Doe summons on Coinbase."
https://www.documentcloud.org/...

And something I think many people don't know

[Sycraft-fu]

Is the IRS regularly does look at lots of financial records. Lots of entities report things about you to the IRS by law. Your W-2s? The IRS already has those, your employer sent it to them. Same with 1098s, 1099s, etc. You'll notice that they say something like "This is important tax information and is being furnished to the Internal Revenue Service." That means they are sending it to the IRS, as well as you. The IRS gets told about things like the interest you earn, and interest you pay, money you make, taxes withheld, and so on.

This is done for everyone. It is normal reporting, not an investigative thing. So the IRS doesn't ask banks/employers/etc for records on specific people, they are given records for all people, from all eligible institutions.

As such you can see why they'd think it might be reasonable to get information from a site that deals with financial transactions. Doesn't matter if you are doing transactions to magic Internet money any more than if it matters if it is transactions to stocks, options, or anything else.

Re:And something I think many people don't know

[Anonymous Coward]

...Your W-2s? The IRS already has those,...

Gee, really? The IRS has paperwork that has been filed with the IRS? WOW! AMAZING! Who would have thought!!!!

Zerohedge is not a financial blog

[Anonymous Coward]

by financial blogger Zerohedge on Twitter

Please. Zerohedge only pretends to be a financial blog. It's the frontpiece of a scam that tries to hype up gold price and dump them on goldbugs who are left with the bag, itself backed by Putin and Russia Today.

IRS merely trying to do its job

[golodh]

I think this was to be expected.

Bitcoin and other electronic currencies are "property" (see e.g. https://www.irs.gov/uac/newsro... )

Now the IRS doesn't automatically monitor all bank accounts: see e.g. here: http://peopleof.oureverydaylif... for

The IRS can however, force banks, foreign exchanges, and now electronic currency exchange houses, to disclose the identity of those engaged in transactions. It can do this to any individual or corporation if they decide to audit them: see here: http://www.libra.tech/blog/how... As far as I know, criminal law does not necessarily apply. A mere administrative decision to audit someone (could even be selected at random) is enough. See https://www.irs.gov/businesses... and here http://www.investopedia.com/as...

Of course, a complete regulatory framework for bitcoin and lookalikes hasn't yet materialised. According to this post: https://bitcoinmagazine.com/ar... it took about a decade to establish it for derivatives, so one might expect the same for bitcoin.

So what we see is the IRS seeing how far it can go, but they seem to have a very strong case. They're not auditing anyone in particular, but merely tracing a web of payments. Could be an audit. And consider the alternative. Suppose for example that bitcoin exchanges need not disclose the names of participants in transactions on request. You'd have an instant on-shore tax evasion mechanism ... and that is against the general thrust of tax law in general, not to mention common sense.

So I'm afraid the IRS will get its way ... and will go even further. Block chains are electronic records of transactions. Therefore potentially every last blockchain involving electronic currency transactions could become subject of disclosure to the IRS.

LifeProTip: Don't identify as American.

[gestalt_n_pepper]

At least as far as bitcoin is concerned.

Shit

[Yvan256]

I bought a few thousand Dogecoins in the last five years.

How many dog treats do you think I owe the IRS?

Re: because there is a chance they are avoiding pa

[Lawrence_Bird]

Yes. The IRS likes their money now. See taxation of zero coupon bonds as one example.

And the New Administration Says ...?

[Toad-san]

I'm very curious as to how the incoming Republican Administration and Congress will respond to this demand for information.

How are they basing the taxing of holdings

[harryk]

I think this is more about the IRS looking for people who have used the exchange of bitcoin (really, the sell) of either mined cones (in which case they would likely be responsible for income tax) or profit earned on the buy/sell similar to that of stock purchases, in which case they would likely be responsible for capital gains tax.

While I hope Coinbase is able to fight this, it's really not that much different than say Fidelity reporting your exchange activity. What is different, at least IMO, Coinbase (in this example) is acting more like a forex platform, exchanging USD for BTC, regardless of whether or not the BTC was recognized as currency at that time.

We'll see where this goes, but I think most of saw this coming as an eventuality once Coinbase started allowing people to cash-out in USD, the IRS had a tangible target to start collecting data from in order to start collecting taxes from the individuals.

-harryk

cronies

[Anonymous Coward]

because cronies want more money. THAT is why.

Will be challenged.

[Anonymous Coward]

As we speak, I am preparing a challenge to this request. 11 pages so far and counting. I expect to file a motion to intervene along with a motion to dismiss/deny the request in a short period of time. I thank Slashdot for bringing this to my attention. :)

Re:Not taxing reserves, looking for gains or incom

[Actually, I do RTFA]

The actually court document introduction focuses on tax avoidance.

Actually, the court document focuses on tax evasion. The difference is huge - avoidance is legal. Evasion is getting paid in cash and never reporting it. Avoidance is getting paid by your employer, and maxing your 401k

Re:Remember when people said Bitcoin was anonymous

[Actually, I do RTFA]

And it's assholes like you who refuse to pay your taxes that have me actually rooting for the IRS in this regard.

But, if you think that's bad, just wait until the IRS decides to charge tax on every bitcoin transfer. After all, they're public.

1099?

[QlooQl]

Normally your broker would send you a 1099 on stock trades...that's fine, but now imagine your credit card sold off very small pieces of stock for every transaction. Now the IRS wants you to fill out that consolidated form 1099 with hundreds of transactions detailing everything you purchased so they can compare that to any capital gains/losses you might have made from buying the bitcoin at a higher or lower price than when you spent the coins... Ok, different example of how this is a disaster. Imagine you purchased Yen in 2014, but had a Yen credit card that automatically converted the Yen into Dollars. The Yen changed value compared to the Dollar over the past 2 years every second of every day. The IRS now wants your full credit card statement...just in case you made money in Dollars they could tax you on due to the exchange rate between Yen and Dollars. Now I'm going to have to do dozens of pages of paperwork and give the IRS detailed information on my daily purchases...ugh.