Slashdot Mirror
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.
"Coinbase has a total of millions of customers."
This sentence really set off my annoyance sub-processor.
#DeleteChrome
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.
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.
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.
"His name was James Damore."
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.
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...
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.
So, you systematically evaded taxes for 5 years, and that makes you angry at the government?
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.
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. ... 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."
"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
https://www.documentcloud.org/...
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.
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
Progressivism (aka US 'Liberalism'): Ideas so good they need a police/surveillance-state to enforce.
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.
Yes. The IRS likes their money now. See taxation of zero coupon bonds as one example.
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.