The IRS Wants User Data From Coinbase

DooKey

DooKey

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The Internal Revenue Service is heading to court today (WARNING auto play video) with the goal of forcing Coinbase, a U.S. cryptocurrency exchange, to hand over data on a host of its users. I would suggest that people that have used Coinbase to move large quantities of Bitcoin/cash around are about to get bit by Fedzilla. Death and taxes folks.

"U.S. taxpayers, including Coinbase users, have made use of virtual currencies to avoid the reporting and payment of taxes," the IRS argued in a court filing. The agency said it needs access to customer records to “gain some degree of visibility into a space where it is already necessarily moving about somewhat in the dark."
 
No no wait! I thought US clearly doesn't need the money because Trump is all about giving everyone tax breaks! especially big ol corporations!
 
darckhart said:
No no wait! I thought US clearly doesn't need the money because Trump is all about giving everyone tax breaks! especially big ol corporations!
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They aren't going after coinbase. They're going after us, via coinbase.
 
Ouch! I bought like 40$ on coinbase and moved it to a wallet, they want what 3$ from that or something?? Like the fees to buy/sell/exchange/mine aren’t freaking high enough already come on dude!
 
Mugato said:
Ouch! I bought like 40$ on coinbase and moved it to a wallet, they want what 3$ from that or something?? Like the fees to buy/sell/exchange/mine aren’t freaking high enough already come on dude!
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They want to see if your held value of BTC appreciated and was then sold for USD. So if you've had 1 BTC you purchased for $10 years ago thats worth $7000 today, they want to tax the gain from that if you withdrew.
 
I had thought there were no such entities in the US, just for this reason

if you have a physical presence in a country, you are beholden to their laws
 
quote wasn't working?

nysmo quote "Thing is I dont understand what exactly they'd be taxing. If I spend a year in Europe and come back to the USA and convert my euro bank balance to USD bank balance, what do they think they're entitled to? It's just my money the whole time. All coinbase can provid them with is a transaction log but that doesnt necessarily mean any capital gains were earned, or whatever they are trying to file this under."

They want to know who the users are in these equivalents of "hidden offshore bank accounts" so you can't hide money transactions from them. It's when your tax returns of reported income doesn't match the money moving in your accounts that they will contact you.
 
otherweeb said:
quote wasn't working?

nysmo quote "Thing is I dont understand what exactly they'd be taxing. If I spend a year in Europe and come back to the USA and convert my euro bank balance to USD bank balance, what do they think they're entitled to? It's just my money the whole time. All coinbase can provid them with is a transaction log but that doesnt necessarily mean any capital gains were earned, or whatever they are trying to file this under."

They want to know who the users are in these equivalents of "hidden offshore bank accounts" so you can't hide money transactions from them. It's when your tax returns of reported income doesn't match the money moving in your accounts that they will contact you.
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yeah i deleted my post once i thought i had figured out what they're up to. I mean in all honesty we know what they're up to, they just want to pry in everyone's financial history to see if they can detect an income stream. This is akin to just auditing everyone in the USA by gaining access to wells fargo, BOA, etc and looking through everyones checking account history. But they probably cant do that, so theyre hoping to get a glimpse from Coinbase since it will have a similar looking audit trail.
 
Maybe they should try setting clear laws and rules regarding the tax reporting of cryptocurrencies.... Oh.... Wait...
 
"U.S. taxpayers, including Coinbase users, have made use of virtual currencies to avoid the reporting and payment of taxes," the IRS argued in a court filing. The agency said it needs access to customer records to “gain some degree of visibility into a space where it is already necessarily moving about somewhat in the dark."

The Paradise Papers show theres $10trillion held offshore to avoid tax but they go after Coinbase.
 
Already planning on reporting my mining income on my taxes because I'm not* a fucking criminal.

*I am, but only for petty amounts. I've made too much money mining this year to not report it.
 
nysmo said:
yeah i deleted my post once i thought i had figured out what they're up to. I mean in all honesty we know what they're up to, they just want to pry in everyone's financial history to see if they can detect an income stream. This is akin to just auditing everyone in the USA by gaining access to wells fargo, BOA, etc and looking through everyones checking account history. But they probably cant do that, so theyre hoping to get a glimpse from Coinbase since it will have a similar looking audit trail.
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Yes. And in a more basic sense they monitor deposits and withdrawals of all bank accounts already. Banks are required to report cashing out $10,000 or more to the Feds for examination as potential criminal activity

https://en.wikipedia.org/wiki/Currency_transaction_report
 
I figured this was coming, but I also figured that I (and others) need to weigh the potentiality of paying taxes and using a US exchange, against the relative obscurity/lack of confidence that comes with Chinese exchanges.
 
If you mine gold in your backyard and put it in a shoe box under your bed do you have to pay taxes on it? This is bullshit, and the implications are darker than just paying taxes. This opens up potential laws that could monitor all stored cryptocurrency.
 
Last year I tried to report my minor bitcoin mining business and my refund actually grew. I thought that wasnt right at all so i took it back off. I suppose this year ill have to amend that last tax return and then show the profit from selling the RX480s for a profit, then the loss of buying 1080s.... I do not want to avoid paying taxes, but its such a pain to show all of this stuff for basically a wash on the taxes side.
 
jardows said:
Actually, I think you do.
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Yup you pay the tax on the value of the gold when it leaves the ground. You pay tax again if you sell the gold for more than what it was valued when you paid tax on when it was mined.

Interestly, you do not pay tax on gold coins when you first receive them, you only pay tax if you sell them for more than you bought them for.
 
Tak Ne said:
"U.S. taxpayers, including Coinbase users, have made use of virtual currencies to avoid the reporting and payment of taxes," the IRS argued in a court filing. The agency said it needs access to customer records to “gain some degree of visibility into a space where it is already necessarily moving about somewhat in the dark."

The Paradise Papers show theres $10trillion held offshore to avoid tax but they go after Coinbase.
Click to expand...

That was exactly my first thought. Fucking seriously? All these richie richs hiding money overseas and they are worried about coinbase? What's the average user on CB holding, 50$?
 
darckhart said:
No no wait! I thought US clearly doesn't need the money because Trump is all about giving everyone tax breaks! especially big ol corporations!
Click to expand...

Unless you are living under a rock, you know that corporations DO NOT pay taxes. Those taxes are just passed down to the people buying the products in the form of increased prices, which is then taxed again when purchased.

The ONLY tax that should be allowed is a flat sales tax rate OR a flat income tax rate.

The FEDs and the State governments can fight over who gets what percentage.
 
The government will not be denied it's pound of flesh.
 
Just start a church and say Jebus blessed you with cryptocurrency and you won't be taxed. Easy....
 
cyclone3d said:
Unless you are living under a rock, you know that corporations DO NOT pay taxes. Those taxes are just passed down to the people buying the products in the form of increased prices, which is then taxed again when purchased.

The ONLY tax that should be allowed is a flat sales tax rate OR a flat income tax rate.

The FEDs and the State governments can fight over who gets what percentage.
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No more regressive taxes.
 
Mugato said:
That was exactly my first thought. Fucking seriously? All these richie richs hiding money overseas and they are worried about coinbase? What's the average user on CB holding, 50$?
Click to expand...
More like it's the Al Capone effect. Couldn't get him on any of the real crimes he committed, so they invented tax laws he couldn't comply with (without admitting guilt to robbery, murder, etc.) and put him away for tax evasion. Probably the same motivation here.
 
cyclone3d said:
Unless you are living under a rock, you know that corporations DO NOT pay taxes. Those taxes are just passed down to the people buying the products in the form of increased prices, which is then taxed again when purchased.

The ONLY tax that should be allowed is a flat sales tax rate OR a flat income tax rate.

The FEDs and the State governments can fight over who gets what percentage.
Click to expand...

And if they didn't collect income tax from me, my employer could pay me less as well reducing the price even further!!!

While the pass down theory AS A FACTOR is true its not as black and white as you make it out to be. Supply and Demand still play a big part in pricing... If taxes were eliminated today it would only allow companies to lower prices if they HAD to or felt they could make more money as a result (putting competitors out of business etc).

sales taxes I would agree are a good form of tax on most items since it taxed consumption and can be controlled just by purchasing habits.

Flat income could work but really depends on the extremes, on the lower end they would be crippled by taxes and the upper end it would be way to little.

IMO the key is to control the deductions and make sure they are current and valid to what the country needs today. Why have a mortgage deduction when rates are so low? etc It doesn't matter if you are liberal or conservative everyone wants their deductions and remove the ones they don't use...
 
They're only going after people that bought or sold 20k usd worth of bitcoin. I'm not anywhere close to that in one transaction, over a few years I may have bought that much. But failed to make a profit off of it.
 
So we are lead to believe GOV is dumb and can't get healthcare exchanges correct but can get a crypto mechanism established?
Maybe use the crypto infrastructure to fix the healtchare mess! Duh! Seems like GOV is selective who they hurt through incompetence
and on their game when it comes to ways to screw over the working class.
 
dandirk said:
And if they didn't collect income tax from me, my employer could pay me less as well reducing the price even further!!!

While the pass down theory AS A FACTOR is true its not as black and white as you make it out to be. Supply and Demand still play a big part in pricing... If taxes were eliminated today it would only allow companies to lower prices if they HAD to or felt they could make more money as a result (putting competitors out of business etc).

sales taxes I would agree are a good form of tax on most items since it taxed consumption and can be controlled just by purchasing habits.

Flat income could work but really depends on the extremes, on the lower end they would be crippled by taxes and the upper end it would be way to little.

IMO the key is to control the deductions and make sure they are current and valid to what the country needs today. Why have a mortgage deduction when rates are so low? etc It doesn't matter if you are liberal or conservative everyone wants their deductions and remove the ones they don't use...
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sales tax is not a good form of tax, it's regressive as all hell and puts undue burdens on the poor.
it's works pretty much exactly like a flat tax would, punishing lower income people.
 
stealthballer123 said:
sales tax is not a good form of tax, it's regressive as all hell and puts undue burdens on the poor.
it's works pretty much exactly like a flat tax would, punishing lower income people.
Click to expand...

But lottsa people love the concept of flat tax, they just ignore all the complications affecting anyone other than themselves.

I vote anarchy.
 
I personally mine all my crypto then sell to some dude whenever i need usd. My accounts probrably look like a dang drug dealer if anyone looked into them :p still undecided on what to do this tax season
 
otherweeb said:
quote wasn't working?

nysmo quote "Thing is I dont understand what exactly they'd be taxing. If I spend a year in Europe and come back to the USA and convert my euro bank balance to USD bank balance, what do they think they're entitled to? It's just my money the whole time. All coinbase can provid them with is a transaction log but that doesnt necessarily mean any capital gains were earned, or whatever they are trying to file this under."

They want to know who the users are in these equivalents of "hidden offshore bank accounts" so you can't hide money transactions from them. It's when your tax returns of reported income doesn't match the money moving in your accounts that they will contact you.
Click to expand...


They also want to know if you are making a profit, IE capital gains. It is up to you to report this but the fed needs ways to audit. In regard to Nysmo, if you took a large enough sum of money from EU back to USA and the fluctuation in currency resulted in a profit for you then you must report it by law. The problem with humans is they always seem to think that if there is some new financial vehicle they can just disregard all law, or if they feel it is not enforceable. So the IRS needs ways to enforce and getting access to bank records is one way they do it. So the way you get around it is you take your money offshore, but if you do that their exists the possibility that a law change, or change of leadership will result in an offshore bank just taking all your money away from you. There is the tradeoff. You want a certain amount of security, you have to play with the countries that are long term stable, and most of them have agreements with the USA to cooperate on investigation of assets.
 
rudy said:
They also want to know if you are making a profit, IE capital gains. It is up to you to report this but the fed needs ways to audit. In regard to Nysmo, if you took a large enough sum of money from EU back to USA and the fluctuation in currency resulted in a profit for you then you must report it by law. The problem with humans is they always seem to think that if there is some new financial vehicle they can just disregard all law, or if they feel it is not enforceable. So the IRS needs ways to enforce and getting access to bank records is one way they do it. So the way you get around it is you take your money offshore, but if you do that their exists the possibility that a law change, or change of leadership will result in an offshore bank just taking all your money away from you. There is the tradeoff. You want a certain amount of security, you have to play with the countries that are long term stable, and most of them have agreements with the USA to cooperate on investigation of assets.
Click to expand...

thats what makes cryptos nice. Very high degree of secrecy (not nessisarily takling about btc) and just about the highest degree of security possible. The only thing a goverment can really do is mess with exchanges.
 
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