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Bitcoin Exchange Ordered To Give IRS Years of Data On Millions of Users (gizmodo.com)
Last month, instead of asking for data relating to specific individuals suspected of a crime, the Internal Revenue Service (IRS) demanded America's largest Bitcoin service, 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. On Wednesday, a federal judge authorized a summons requiring Coinbase to provide the IRS with those records. Gizmodo reports: Covering the identities and transaction histories of millions of customers, the request is believed to be the largest single attempt to identify tax evaders using virtual currency to date. As a so-called "John Doe" summons, the document targets a particular group or class of taxpayers -- rather than individuals -- the agency has a "reasonable basis" to believe may have broken the law. According to The New York Times, the IRS argued that two cases of tax evasion involving Coinbase combined with Bitcoin's "relatively high level of anonymity" serve as that basis. "There is no allegation in this suit that Coinbase has engaged in any wrongdoing in connection with its virtual currency exchange business," said the Justice Department on Wednesday. "Rather, the IRS uses John Doe summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown." In a statement, Coinbase vowed to fight the summons, which the company's head counsel has previously characterized as a "every, very broad" fishing expedition.
Prison Planet, USA.
What is the difference between this and the IRS asking for banks to release 3 years of all of its customers records, because cash is anonymous?
love is just extroverted narcissism
....cash should be used whenever possible.
As soon as Bitcoin entered common parlance, this became the obvious endgame.
As soon as you could purchase normal day-to-day goods, it became inevitable.
And as much as it sucks ... they're right. Using crypto currency does avoid taxes, even if that isn't the primary intent.
I just wish they'd found a better way to address the issue. A mass subpoena is rather inelegant, and will cause a lot of pushback.
This signature is false.
You have no idea what you are talking about.
Seriously... you don't know what you are talking about. The 18th amendment established prohibition against alcohol, and was utterly repealed by the 21st amendment, so technically it is the 18th amendment itself that is unconstitutional, not the IRS.
File under 'M' for 'Manic ranting'
Serious question here.... I thought bitcoin was pretty anonymous when all is said and done, so how would they know which wallets belonged to Americans as opposed to people from other countries?
File under 'M' for 'Manic ranting'
If somebody had bitcoins, was smart to keep a blockchain in his own computer, and apply some common sense, this is not an issue.
If somebody opened account, provided name other information, then had to realize that their custodian is merely another type of bank, and all of the transactions will be subject to the scrutiny. Just like the regular old fashioned bank.
This is merely a way to scare bitcoin users.
Those who understand bitcoin have enough brain to maintain their anonymity.
The premise of your question is flawed. BitCoin transactions are NOT anonymous, they are actually tracked *forever* in the block chains which are public records. What's supposed to protect you is that your wallet (a set of Crypto Keys actually) is used to identify parties in a transaction. Where it may not be easy to match the wallet to the person (or entity) making the transaction, but once you do, you can find EVERY transaction made by that wallet from public information.
Those trading BitCoin (which is something impossible to physically trade) must do so electronically, which means you have to use some kind of exchange at some point in order to obtain something of value for your BitCoin (i.e. trade it for something else). It's these conversion transactions where the anonymous nature of those Coins really isn't so safe and one's identity can be revealed. Once you are identified as the owner of a wallet, then everything you've done falls out of the public record in the block chains.
Serious question here.... I thought bitcoin was pretty anonymous when all is said and done, so how would they know which wallets belonged to Americans as opposed to people from other countries?
Coinbase requires your personal information top open an account with them. Even if you use a foreign address the IRS can still lookup your name and birthdate in the Social Security database. The purpose of an exchange is to be able to convert bitcoin to other currencies and vice-versa and unless you are handing someone cash for the transfer of bitcoins, there will always be a identifiable record of a electronic transaction going through bank accounts or credits cards. Security (or anonymity) is only as good as its weakest link
Honestly, nobody knows what the fuck he would say.
Or whether or not he'd change his opinion the next day, depending on who he met with that night.
There are two types of people in the world: Those who crave closure
I hate it when they use his own words against him.
It makes them look so bad.
There are two types of people in the world: Those who crave closure
Why would anyone use BitCoin for tax evasion when they could just incorporate and use the many legal tax loopholes that the government refuses to close?
being there is no tax in the books for using it its more a scare tacit rember its the irs your dealing with they dont even understand there tax laws.
It is very likely that I don't understand enough about Bitcoin!
Question 1: Why would anyone who thought that they might not be paying all their US taxes use an exchange based in the USA? Is it something to do with needing to convert the Bitcoins to Dollars so that you can actually spend them?
Question 2: Given that one of the main selling points of Bitcoin is anonymity, why would someone operating an exchange keep any but the barest records? I appreciate that they can't destroy the information now they have been asked for it, but I am trying to grasp why they would put themselves at risk of being in that position by retaining it in the first place?
There is no definition of income in the constitution, and there are a bunch of convoluted court rulings on income taxation. (It's not all that comes in.) This move by the IRS is (as I believe) to be unprecedented. It is effectively assuming that any american who traded bitcoin was evading the income tax without any evidence thereof. This presupposition of guilt is what makes it newsworthy. Anyone who traded btc is assumed to have evaded the tax, even though self-reporting is the obligation of the taxpayer always applies. Furthermore, the taxes due would only be on the profits of trading, just like a stock. But unlike a standard stock broker, a 1099-B would not be issued by coinbase automatically. It's not coinbase's responsibility to report, it's the taxpayers.
Good luck evading this one... the blockchain is public. Which begs the question... does the IRS have blockchain analysis tools?
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
Isn't this a duplicate of https://yro.slashdot.org/story... ? The other one was even posted by BeauHD as well.
You find it is true of most nations, actually. If you are playing with finances in their borders, their tax agencies get to have a look at what is going on. Doesn't matter if you are a citizen or not. There can be tax implications even if you are't a citizen but regardless they want to see what is going on.
I mean look at the FIFA guys who got brought down by the US: It happened because they were doing shit with US currency and US banking. That is why the US took an interest and has legal standing.
It is my understanding that if a US citizen has any income, they are expected to declare it, whether it is identified in data submitted by other parties (such as your employer) or not. If they don't declare and pay taxes on the income, they have probably violated the US tax code. Since buying and selling Bitcoin can result in income, not declaring that income would probably violate the tax code. The US IRS knows the tax code very well. They may sometimes push the envelope on enforcement, and every once in a while they might lose in court, but I think they win far more often than not.
The 18th amendment established prohibition against alcohol, and was utterly repealed by the 21st amendment, so technically it is the 18th amendment itself that is unconstitutional, not the IRS.
Not quite. The 18th Amendment mandated prohibition. The 21st took away the mandate, but left the authority.
Section 1. After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all the territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.
Section 2. The Congress and the several States shall have concurrent power to enforce this article by appropriate legislation.
See, it forces a course of action.
Section 1. The eighteenth article of amendment to the Constitution of the United States is hereby repealed.
Section 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited./i
Now the 21st, repeals the 18th's mandate but reinforces that prohibition is itself, still a legal option.
It is a property bought and sold for profit and is subject to capital gains taxes. Just like gold or silver profits would be.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
Depends on how much of a crime deleting then would be
reserves? I didn't see that in the summary. It's a capital gains issue, similarly to that of gold or silver.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
I don't always take tax advice on the internet, but when I do, I take it from someone who spells like a twelve year old and can't form a comprehensive sentence.
Beware of the Leopard.
The Jefferson Clause of the United States Constitution...
Is that the one that talks about a guy and his wife that are movin' on up (movin' on up) to the East Side (movin' on up), To a deluxe apartment in the sky?
You have the right to remain sentient. If you give up the right to remain sentient, you will be elected to public office
Do you want to try explaining how you think that works with something more elaborate than a vacuous claim, or should I conclude more or less the same thing about how much you know what you are talking about as I concluded about the AC to which I responded, earlier? If you are the same AC, then this already explains a lot, but I'll give you the benefit of the doubt.
File under 'M' for 'Manic ranting'
All the good capital gains were people that bought in 2013 and earlier. I came late to the party. Bought some bitcoin on coinbase after the big bubble to $1200 deflated to $500-600. Sold some at $830 again on coinbase and started buying back in way to early. I didn't claim the loss from hodling my bitcoin through 2014 and 2015, why should I claim any gain from holding it through 2016? I haven't sold a single bit since I started buying back in. I lost a small fortune at Cryptsy in fact. I did a lot of alt coin trading on exchanges that don't even exist anymore. It would be impossible to calculate any gains and losses. I'm just not going to mention anything crypto related to the IRS unless they send me some kind of request.
It's NYT, those digs aren't random.
They are regulated by the Feds and by all 50 states* as money transmitters. That isn't cheap nor is it easy to just replicate quickly, let alone overnight.
* I think 1 or 2 states don't require a fee or registration, but there is enormous pressure for all states to regulate money transmitters
The basic issue is not about bitcoin. It is about the scope of warrants, summonses, and subpoenas. The Fourth Amendment to the U.S. Constitution states:
> The right of the people to be secure in their persons, houses,
> papers, and effects, 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.
I doubt there is "probable cause" that tax evasion has indeed been committed by Coinbase's users. Such a broad summons fails to describe which persons' accounts are to be examined. Since the summons was served on Coinbase, which has not been suspected of a crime, a challenge of the summons to appeals courts or the US Supreme Court might be very successful.
Now the 21st, repeals the 18th's mandate but reinforces that prohibition is itself, still a legal option.
It is not just an option, but in practice in many locations. Many dry counties, mostly in the Southeast, prohibit the sale of alcohol. Alcohol is also prohibited on many Native American reservations.
Dry communities in America.
You might be retarded. There is no Jefferson Clause in the constitution. It was a *failed* provision of the Declaration of Independence addressing slavery
I see that the IRS is eager to tax those who profited off of Bitcoin. Will they be retroactively reducing taxes and issuing refunds for everyone who took a loss on it as well? Only seems fair.
Since buying and selling Bitcoin can result in income, not declaring that income would probably violate the tax code.
The IRS is obviously interested in who is BUYING Bitcoin to investigate, because if you sell more than a few hundred $$$ in Bitcoin through
Coinbase, then Coinbase has to issue a 1099-K to you for the sales proceeds, so the IRS has information about sales anyways.
Apparently there must be some tax liability the IRS believes you incur simply by holding Bitcoin.
Perhaps they are expecting Bitcoin reserve holders to Mark their assets to market periodically and report any increase in market value as income when it occurs.
When the IRS or any other agency wants discovery of evidence in a case, it should be demonstrating interest in a specific person, partnership or corporation being investigated. The whole idea of John Doe warrants is an unconstitutional fishing expedition. Let's hope that now we'll get some new Supreme Court appointees who don't rubberstamp the government's every whim.
Since I bought 0.1 Bitcoin (long since used) just to be sure I had an easy way to buy Bitcoin in case I needed to do so for someone hit by ransomware but with no backups.
I hope the IRS doesn't come after me for taxes on my approximate increase from $31 to ~$41 that I used on domain renewals. Oh, and the $1.11 worth still in my account.
fencepost
just a little off
Apparently there must be some tax liability the IRS believes you incur simply by holding Bitcoin
Holding alone, doubtful. I bet they're interested in people who bought Bitcoin, saw it appreciate greatly in value, and then used it to make direct purchases.
Suppose you bought 100BTC in January 2015 at $200/BTC, then last month when the value hit $700/BTC, you used your 100BTC to buy a $70,000 BMW. You realized a $50,000 in profit on your initial investment, of course the IRS would love to know about it.
"If there was a gay Afro-Puertorican Linux distribution, I'd give it a try" ~lucm
Trump has repeatedly declared war on the press.
Some have accepted the declaration and see themselves as an "opposition" since cuddling up to get interviews is only delivering deception instead of factual news.
Expect things to get very ugly.
Doesn't that just reinforce what was already in place prior to the 18th?
That is, alcohol would be something covered by the 10th Amendment ("The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people".)?
I also recall that prior to alcohol prohibition some states were banning the sale of tobacco:
Between 1895 and 1921, 14 states banned the sale of cigarettes (Neuberger, 1963: 52). Even in the city of New York it was declared unlawful for women to smoke in public
And I can't find a citation now, but I'm sure I've read that there was an effort to have it banned at the federal level but a Congressional committee decided that they did not have that authority and that it was a state issue protected by the 10th.
Then they figured out the power of the Interstate Commerce Clause and we ended up with decisions like Wickard v. Filburn and later Gonzales v. Raich.
I am no legal scholar (certainly not a lawyer), but it seems to me that based on those decisions we didn't actually need an Amendment to enact Prohibition. Or maybe we did and those decisions were wrong and thus the federal prohibition on marijuana and other drugs is unconstitutional. But that's not what SCOTUS has said since so we have to accept those decisions as Constitutional.
I'm in favor of legal marijuana and alcohol but I'm not so sure about all the other drugs including ones available only by prescription - like antibiotics.
I suspect that reflects most American's opinions too so how do we resolve this without passing a new Amendment giving the Feds authority over so many things? Each state could pass their own laws, which would result in a crazy patchwork (kind of like we have now with alcohol at least, but with every other drug thrown in) or the state law could say they'd go along with whatever the feds (DEA? FDA?) decided on most drugs.
Or should the ICC really cover that - and if so, what if the feds wanted to control alcohol again? Well, they do at least impose taxes and we do have the ATF or rather the BATFE. Let's just add marijuana for now and call it "the BATFEM".
I've been in dry counties in Texas, but instead of going to a bar you go to a "club" and most of them just give you a membership or charge you a small fee for one. It kind of blew my mind when I found out that in some parts of Alaska even possession of alcohol was illegal.
Oh well, this was supposed to be about the IRS, Coinbase and Bitcoin.
Bitcoin presents a bunch of legal challenges as well. Should Coinbase have to report bitcoin transactions greater than $10,000 like my bank would if I make a transaction for that amount? It's not even issued by the government.
Where does my Bitcoin wallet even exist?
I don't actually have a bitcoin wallet or any bitcoins and the whole thing seems....somewhat risky at the very least.
The way he has been whipping up crowd hatred against media members at his rallies for months is what has been referred to as well as his comments.
Now we are seeing the sort of reaction that happens from media outlets when they have nothing to lose.
Attempting to be nice to Trump and pretending that his deceptions are real is getting the media nothing but more hate, so why play nice?
At least that's the way a professor of Journalism was describing the situation - I can't find the quote on the net since it was a radio interview. If you don't want to take my word that some people have opinions like that then you wouldn't believe a citation anyway.
Adding a correction to a comment even gets zeroed, sad
This seems like an "illegal search and seizure" to me. You need evidence an individual has done wrong to get that individuals history.
If you have no evidence of wrong doing be an individual or the company, you should not get a warrant for the company's data on that individual.
This is equivalent to saying: We found evidence of murder in two poeple's homes, so we are requesting all the homes in this city to be opened up for search.
This judge should be fired and fined for failure to follow the constitution.
Recently a judge ruled that Bitcoin is not currency. So how could there be taxes due on something that isn't money that is based on money?
http://www.usatoday.com/story/...