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Coinbase Ordered To Report 14,355 Users To the IRS (theverge.com)
Nearly a year after the case was initially filed, Coinbase has been ordered to turn over identifying records for all users who have bought, sold, sent, or received more than $20,000 through their accounts in a single year. The digital asset broker estimates that 14,355 users meet the government's requirements. The Verge reports: For each account, the company has been asked to provide the IRS with the user's name, birth date, address, and taxpayer ID, along with records of all account activity and any associated account statements. The result is both a definitive link to the user's identity and a comprehensive record of everything they've done with their Coinbase account, including other accounts to which they've sent money. The order is significantly narrower than the IRS's initial request, which asked for records on every single Coinbase user over the same period. That request would also have required all communications between Coinbase and the user, a measure the judge ultimately found unnecessarily comprehensive. The government made no claim of suspicion against individual users, but instead argued that the order was justified based on the discrepancy between Coinbase users and U.S. citizens reporting Bitcoin gains to the IRS.
They told me cryptocurrencies were anonymous :^)
We need a Patriot act for finance. What do people have to hide?
Make ONE association of a transaction to an individual, and then you have ALL transactions that individual has ever made, all recorded. It won't just be a single year that can be checked, it will be all years, from any source. The fatal flaw of blockchain is that all transactions are 100% traceable, and each transaction uses an identifer that is unque - and consistent - to a single user. Crack that association once - and it's cracked for all time, past, present and future. Cash is still anonymous ...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
and the IRS jail you for cheating on your taxes!
Time to actually use a currency with real privacy...
"Got cloth?" - Hillary Clinton
It's the IRS, lol. Those miners about to be taxed, hope they didn't spend it all - they might need some of it + penalties.
Most people are just fine with using a bank account to store money, and credit cards to purchase items where all sorts of people and agencies can review transactions.
Why would any of those people care if transactions could be traced forever? Lots of people already sign up with bitcoin exchanges giving as much information as they would a bank.
The only people that is a "fatal flaw" for are people who do not want anyone to review transactions, and long term they will not make up more than a small percentage of bitcoin users.
It does mean as this gets adopted bitcoin is less anonymous than cash, for sure. But again most people do not care as long as it as convenient as cash.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I signed up for a Kraken and Gdax (aka Coinbase) account lately and between the two I needed a live pic of my license, pic of me holding my driver's license, my social, my full name, a scan of my license, a pic of me holding my signature, etc. They comply with the banking secrecy act or they get shut down (like Tradehill). So because I had to give them all this, I report all my income in Quickbooks at my company where I run 4 giant mining rigs. So don't just assume all of us are tax evaders as most of us are not.
Not that I count much on the wisdom of markets but I am curious about the relative timing of today's jump in BTC and the news of that ruling. A Bloomberg article dated today, on bitcoins risks did not mention this.
SLASHDOT: news for people who can't concentrate on work or have no life at all and got tired of yelling back at the TV.
Do you pay with virtual dollars?
They screwed me and have held my $8000 cash and take 2 weeks to respond to an email.
I thought transactions that are "Paid-In-Kind" are exempt. Money for money should not be taxed.
All gun owners must be murderers because why else would someone need a gun ... uh ... uh ... Okay well not ALL users just the ones who bought more than $20k because that sounds like a really big number to [edited] people who are afraid of spooky numbers and computers and stuff
All Italians must be affiliated with the Sicilian mafia because Sicily is part of Italy
All beautiful women must be promiscuous because why else would they be beautiful
All coinbase users must be tax evaders simply because
I thought transactions that are "Paid-In-Kind" are exempt. Money for money should not be taxed.
The IRS would argue that bitcoin is not money. It's no different than if you bought and sold gold coins for a monetary gain. You owe tax on the gains.
and the IRS jail you for cheating on your taxes!
That's no joke. The US Government considers cheating on taxes to be a very serious offense. In fact, the tough penalties for tax crimes are so well known that prosecutors sometimes elect to go after the tax charges, rather than other chargeable offenses, because the penalties are so much higher. There was a case in Las Vegas some years back where instead of busting a pimp for running prostitutes, which had a 2 year prison sentence, they prosecuted the guy for tax evasion because he didn't declare and pay taxes on his pimping income and he got 30 years for that instead. This wasn't an accident. The authorities didn't like the guy and wanted him off the streets, so they used the tax charges to put him away for a long time and didn't even bother with the pimping charges.
I have never understood why the tax authorities in the US (or, indeed, almost anywhere else) should be exempt from the requirement to get a warrant.
If the government suspects you of wrongdoing, they are supposed to present evidence to a judge, in order to get the right to invade your privacy. Yet tax authorities have direct access to your banking information, your salary, your investments - and now, of course, they want your cryptocurrency transactions. Why should they have this right?
Sure, some people would cheat on their taxes. That doesn't (or shouldn't) give the government carte blanche to invade your privacy. Alternatively, maybe a tax system that requires massive invasion of privacy is the wrong way for governments to collect money.
Enjoy life! This is not a dress rehearsal.
Al Capone on line 1....
how can they be forced to turn over their own property? it's time to burn down washington and erase 200 years of constitutional "precedent". it seems like the only reason anyone becomes a "constitutional scholar" or judge is to find sneaky ways of undermining our rights and granting more power to the feds.
Was the IRS only interested in transactions where dollars were exchanged? And if not, then what reference did they give to assign the dollar value of the other currency at the time the transaction occurred?
So basically: 1) Hoard 2) Move to a tax haven 3) Then cash out
Say hello to the bottomless pit of corruption happily eating every dollar thrown at it and asking for more.
I lose all kinds of money mining. I have mined about $2500 worth of coins this year but spent over $6000 on mining hardware, so I will claim a $3500 net loss on Schedule C this year to offset some of my regular income. I plan to spend at least that much more beyond my mining revenue in 2018 as I grow my mining farm.
They can audit me all they like for reporting losses year after year. That in and of itself does not make a hobby loss business. Because I am expanding and increasing my mining capacity, it demonstrates clear profit motive in the long term.
But, for now, give me my refund, bitches!
Government can't live without TAKING any money they think they are "owed".
hey prosecuted the guy for tax evasion because he didn't declare and pay taxes on his pimping income and he got 30 years for that instead.
Without a citation to that, I'm going to be wary of your story for one reason. It's the "he got 30 years for that instead". In the US legal system the correct thing would be "he got 30 years for that in addition to the 2 years for pimping".
You can be found guilty of multiple crimes at the same time. The only way they wouldn't have prosecuted him on the pimping as well would be if proving the case would be too time consuming and expensive or the case wasn't very strong and they were content with just the 30 years, and I've never met a prosecutor who thinks that way. They operate on the tax payers dime, so money is no worry.
Transactions paid in kind are exempt, but they stop being paid in kind if the transaction from one currency to another and then back results in a net gain or loss.
In the US legal system the correct thing would be "he got 30 years for that in addition to the 2 years for pimping".
Not necessarily. To be convicted of pimping, they actually have to catch him doing it. Or have evidence that he did.
Tax evasion can be shown by demonstrating a significant difference between lifestyle and income that lacks a plausible explanation.
E.g., if they can show that your rent or mortgage is $24K/year and you only reported $10K income, then there is a very strong possibility you are underreporting your income. If you have financial statements that show you burning through your savings or taking out loans, then you have an explanation for how this is possible. If you have friends or family testifying that they loaned or gifted money to you, that could work too---but it may prompt the IRS to start investigating their finances, and it exposes them to perjury charges if they're lying.
Since financial transactions are retained for several years, it is fairly easy for the IRS to dig into the recent past.
As long as money is being exchanged for money that has equal value it should not be taxed. If you pay $5 USD and receive the equivalent value of $5 USD in BTC then there's nothing to tax.
However, if you spend $5 USD and received $10 USD worth of BTC then you should be reporting the difference of $5 USD as income. Further, if you purchase $5 USD worth of BTC with $5 USD and the value of BTC relative to USD rises so your $5USD worth of BTC is now $500 USD worth of BTC then you would be required to file the difference ($495 USD) as income once you no longer possess the BTC unless the method by which you lost possession of the BTC is not due to theft, loss, or purchasing an item worth $500 USD or less. If you bought something worth $1000 USD with your BTC now worth $500 USD you would have to report $500 as income.
The IRS has a very keen interest on getting the transactional records of individuals who are doing things in BTC because by their definitions there's plenty of opportunity there for tax evasion.
"Lack of speed can be overcome. In the worst case by patience." --Znork
Capone is similar but sufficiently different. With the Las Vegas pimp they had the evidence and witnesses to pursue the pimping charges or the tax evasion charges but elected for tax evasion because of the higher sentencing to keep him off the streets for longer. With Capone they lacked the evidence and witnesses to nail him for the organized crime charges but were able to eventually get the evidence to make the tax evasion charges stick to him to get him off the streets. The former is a little more egregious because the prosecution made a conscious decision to punish someone for being a pimp by using the tax laws rather than charging the guy with the crime that directly harmed other individuals. It wasn't even a situation where they failed to convince the jury of the pimp charges and then elected for the tax evasion charges which would at least have a more honorable pallet.
"Lack of speed can be overcome. In the worst case by patience." --Znork
You have however gained financial wealth over time. That's either a capital gain, or an income. Both are taxable.
How you gained it is only of interest when working out which aspect of the tax legislation applies.
correct, so the follow-up is that since they also are going after transfers, at what point do they consider you having cheated.
Using stocks as an example:
1) I buy one share of MegaCorp for $100 in an eTrade account.
2) The stock goes up to $1000: I have a paper gain of $900, but no real gain, so no taxes are due.
3) I transfer that stock to Merryl Lynch, still no gains
4) I sell the stock and after commissions etc. I pocket an $850 gain. I owe taxes on the $850.
It sounds like the IRS is considering taxing at step 3 which is an issue, unless they can prove that step 4 had to have happened implicitly.
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I have a hard time feeling bad for a pimp.
whois gawk date unzip strip find touch finger mount join nice man top fsck grep eject more yes exit umount sleep dump
so the fucking scum at the IRS gets private info on random users because some might be criminals? what a coward the judge is. the IRS should have to name the fucking individual, the suspected crime, etc. etc. like the goddamn constitution fucking says. do you get to search random houses because criminals are suspected of living in a particular city? give these pigs time i guess and there will be city wide Mohamed searches. maybe there were after the boston marathon incident? every company and employee in the US that files and pays the IRS is a seditious piece of shit. you are all complicit in the systematic destruction of the ideals and soul of this country. you are not an American. stop waving your flag you dumb son of a bitch.
If you write a check for $10k or over, the banks have to hold it for 10 days, and report it. The judge should have chosen $10k... and this should be true for ALL cryptocurrencies.
Cryptocurrencies: avoid paying taxes (and stick the rest of us with your damn taxes), and helping crime (ransomware? money laundering anyone?)
they're not going after transfers. Stock is stock, so transferring it from which holding company holds it is immaterial and has no gain.
However, if one was to trade stock for a different stock that has a different price, there is a possible gain or loss. You would be taxed on that transfer too.
Whats going on here is that because coinbase allows trades between coins, there could be discrepancies in taxes based on profit or loss.
If coinbase only dealt in bitcoins, your reading would be true, but because they allow trades of other coins to other coins, its possible that there is lost revenue and thus lost taxes.
ah, didn't think about that angle... and ooooh that's a tangled mess!
whois gawk date unzip strip find touch finger mount join nice man top fsck grep eject more yes exit umount sleep dump
This article just made me go check my coinbase account. Of course i did $20,080 worth of transactions and the worst part is the coins I transferred in Coinbase assigned a cost basis of $2-5 for some reason...God I wish I had purchased .5 bitcoins for $2.38.
Now it looks like I have almost $15,000 in capital gains. Wonderful.
What we still have is a citizen who is responsible for paying taxes and a government that is constitutionally authorized to collect taxes. Since cryptocurrency has been determined to be an asset by the IRS its use seems to fall under the regulations regarding "bartering income". Sorry, cryptocurrency is not really anything new in this sense.
What we still have is a citizen who is responsible for paying taxes [on taxable items] and a government that is constitutionally authorized to collect taxes [within the scope of the law].
Nope. Bitcoin/etc is definitely new, a way of storing value that can't be seized. It's better than burying gold in the back yard.
And the fishing expedition is still illegal whether or not capital gains taxes are lawful.
What we still have is a citizen who is responsible for paying taxes [on taxable items]
and income, whether fiat or barter or bitcoin
Bitcoin/etc is definitely new, a way of storing value that can't be seized.
Actually it already has been seized. Seize a wallet and the coins are seized. The FBI seized 40% (?) of the bitcoin wallets at the Russian exchange BTC-e.
> Actually it already has been seized. Seize a wallet and the coins are seized. The FBI seized 40% (?) of the bitcoin wallets at the Russian exchange BTC-e.
The keys in a personal wallet, on a cellphone for example. are encrypted with a PIN/passhphrase and can be backed up. So even if someone loses the phone, s/he can restore the keys on a different device.
> Actually it already has been seized. Seize a wallet and the coins are seized. The FBI seized 40% (?) of the bitcoin wallets at the Russian exchange BTC-e.
The keys in a personal wallet, on a cellphone for example. are encrypted with a PIN/passhphrase and can be backed up. So even if someone loses the phone, s/he can restore the keys on a different device.
Hence the 60% not seized, but the point remains coins were seized via the wallet. Coins are also lost accidentally due to the loss of a wallet. We all know how good the average user is with their backups, and their PINs and passwords for that matter. Also when the government wants your coins they will likely get a warrant for all your computers, phones, backups, etc.
can't argue with the barrel of a gun, for sure, nor should one try
I could easily move 5-10x that amount in through my bank in a year without the bank reporting anything to the government. Why does Coinbase warrant this level of scrutiny?