Beware BitCoin Users: The Tax Man Cometh!........... V

[Ponce]

Well....and this is why I don't invest in "I don't hold it" currency.........I knew that sooner or later someting like this would happen.....you can run, but you can't hide.
====================================

re you barrons of BitCoin – you World of Warcraft one-percenters: the long arm of the Internal Revenue Service may soon be reaching into your treasure hoard to extract Uncle Sam’s fair share of your virtual treasure.


Services for buying and exchanging virtual currencies and goods abound online. GAO found that many are likely taxable under current U.S. tax law.
That’s the conclusion of a new Government Accountability Office (GAO) report on virtual economies, which found that many types of transactions in virtual economies – including bitcoin mining and virtual currency transactions that result in real-world profit – are likely taxable under current U.S. law, but that the IRS does a poor job of tracking such business activity and informing buyers and sellers of their duty to pay taxes on virtual earnings.

The report, “Virtual Economies and Currencies: Additional IRS Guidance Could Reduce Tax Compliance Risks” (GAO-13-516) was released this week. It was prepared in response to a request from the U.S. Senate Committee on Finance, which asked GAO to look into virtual currencies and the IRS’s approach to addressing their tax implications. The GAO said that the IRS’s tax treatment of virtual currency transactions is lax, and that the growing use of virtual currencies like BitCoin and virtual game currencies warrants the U.S.’s tax collection agency to mitigate the risks. Those include efforts to educate taxpayers and the publication of basic tax reporting requirements for transactions using virtual currencies.

Virtual currencies have gained favor in recent years, as the sophistication and complexity of virtual economies have grown. In-game currencies for virtual environments like Second Life (Linden Dollars), The Sims (Simoleons) and World of Warcraft (WoW Gold) have sprung up as a way for players to buy and sell virtual goods. While the currency is often earned in exchange for in-game activity and labor, many virtual currencies can also be purchased with real-world currency through in-game or third party exchanges. The exchanges have attracted the attention of law enforcement, who recently cracked down on Liberty Reserve, a Costa Rica-based virtual currency firm popular among cyber criminal groups.

GAO said that strict virtual (or “closed flow”) transactions in which virtual currency is used only within a game or virtual environment to purchase virtual goods and services were not taxable. However, so called “hybrid” and “open flow” virtual currency systems, in which real world currency is used to buy virtual currency, which is then used to buy or sell virtual- or real world goods and services are subject to U.S. taxes.


Many types of virtual currency systems generate taxable revenue, GAO said.
Some virtual economies in massively multiplayer online role-playing games (MMORPG) like World of Warcraft are “hybrid” systems in which in-game economic activity can spill into the real world via third-party transactions in which virtual goods are exchanged for real money, GAO said.

Virtual currencies like BitCoin and the Linden Dollars of used-to-be-cool virtual environment Second Life are examples of open flow systems in which virtual currencies can be used to purchase both real and virtual goods and services, then exchanged for real world currencies like the U.S. dollar.

GAO provides a number of examples of virtual transactions that are subject to taxation that, in all likelihood are not taxed. They include “John,” a resident of Second Life, who rents a virtual property to other residents who pay him in Linden dollars. “At the end of the year, John exchanges his Linden dollars for U.S. dollars and realizes a profit. John may have earned taxable income from his activities in Second Life,” GAO said.

There is also the example of “Bill” the Bitcoin miner who successfully mines 25 bitcoins. “Bill may have earned taxable income from his mining activities,” GAO said.


BitCoin mining and exchanges are taxable under most scenarios, GAO said.
The problem with virtual currencies is similar to the challenges the IRS has in capturing other kinds of economic activity, such as cash transactions and barter, where records and third party reporting is lax or non-existent, GAO said. Still, the growing popularity of virtual currencies and exchanges pose unique risks, including lost tax revenue and tax evasion by way of virtual currencies like Bitcoin.

While the extent of the virtual currency problem isn’t known, and in light of the IRS’s sequester-based staffing issues, GAO recommended that IRS take mostly low-cost steps to address it, rather than mounting a large and expansive campaign to crack down. IRS should publish clear guidance of what kinds of online transactions are taxable and clarify third party reporting requirements to counter misinformation that is circulating. However, as the extent of virtual currencies and economies grow, IRS may find it needs to take bolder steps to bring virtual economic activity into line with other kinds of transactions, GAO said.

https://securityledger.com/2013/06/beware-bitcoin-users-the-tax-man-cometh/

[Twisted Titan]

The growing use of virtual currencies like BitCoin and virtual game currencies warrants the U.S.’s tax collection agency to mitigate the risks.


And what is that risk:

The insane idea that you should keep 100% of what you have earned or labored for.

[Shami-Amourae]

Bitcoin. Stop calling it BitCoin. Please.

[EE_]

Bitcoin. Stop calling it BitCoin. Please.

Maybe soon we will be calling it "GOVcoin", or "NWOcoin"?

[Shami-Amourae]

Maybe soon we will be calling it "GOVcoin", or "NWOcoin"?

Based on what? Government disinfo to make sure you hate any viable alternative to the Rothschild global banking system? Sure, lets trash, demonize, and publish disinfo that can't even properly spell "Bitcoin". How are they credible?

[EE_]

Based on what? Government disinfo to make sure you hate any viable alternative to the Rothschild global banking system? Sure, lets trash, demonize, and publish disinfo that can't even properly spell "Bitcoin". How are they credible?

Have we learned nothing? Technology allows the gov to track all your moves and communications. What do you think they will be capable of 1 to 5 years from now? You've watched the banker owned police state grow daily...you are watching this country burn from within, and you think you found the one thing that resides in cyberspace that will save you?

[Son-of-Liberty]

They are only going to be able to collect taxes on those that comply. It is very easy to make yourself completely anonymous with a little know how and creativity.

[Shami-Amourae]

Have we learned nothing? Technology allows the gov to track all your moves and communications. What do you think they will be capable of 1 to 5 years from now? You've watched the banker owned police state grow daily...you are watching this country burn from within, and you think you found the one thing that resides in cyberspace that will save you?

YES! What you're basically saying is "The government has technology. Therefore all technology is bad. Don't use it!" You might as well get rid of your guns since the government has drones and tanks.

Technology is a double edged sword. If you DO NOT keep on top of it, it WILL be used to enslave you. If you haven't figured out we are in an arms race. Bitcoin was designed to be decentralized technology system that can't be taken down, just like the Internet. It's meant to liberate people like the Internet has done. The people in government are almost all idiots. They may have unlimited money and technology to go with that but they don't know shit about it. Most tech geeks are Libertarian. The tech community support and promotes Bitcoin since it's the only viable path to liberty in the new world we live in. There is no other way. You don't have to overthrow them, you just have to replace them.

[Ponce]

Shami? you cannot run faster than the government......we obtain our know how years after the government get theirs.

V

[EE_]

YES! What you're basically saying is "The government has technology. Therefore all technology is bad. Don't use it!" You might as well get rid of your guns since the government has drones and tanks.

Technology is a double edged sword. If you DO NOT keep on top of it, it WILL be used to enslave you. If you haven't figured out we are in an arms race. Bitcoin was designed to be decentralized technology system that can't be taken down, just like the Internet. It's meant to liberate people like the Internet has done. The people in government are almost all idiots. They may have unlimited money and technology to go with that but they don't know shit about it. Most tech geeks are Libertarian. The tech community support and promotes Bitcoin since it's the only viable path to liberty in the new world we live in. There is no other way. You don't have to overthrow them, you just have to replace them.

The difference between you and I, you believe technology is our future and it's good. I believe technology will be our undoing. How strong is a/our society that is so dependant on this technology? I believe we will find out in time...maybe on a small scale during power outages, or due to a cyber attack.
I have no faith in our future on our current path. Maybe when this path is changed I will find new faith. Where we are going, not guns or gold will save us...but we have so few alternatives that we will cling to them until the end.
I'll bet you we will have guns and gold a lot longer then you will be holding Bitcoins.

[madfranks]

Why don't all of you naysayers actually try it out before you condemn it? You can get a bitcoin wallet for free, no name, no address, no phone number, no social security number, NOTHING. Just generate your own wallet, and it will be somehing like this:

31uEbMgunupShBVTewXjtqbBv5MndwfXhb

Now tell me, with this bitcoin wallet as the ONLY source of ID for the money, how is any IRS agent, any gov't agent, anyone in the world going to identify who's bitcoin wallet this is?

[Cebu_4_2]

I couldn't mine easily and do not have the knowledge to set the shit up so I deleted my wallet and everything with it... was in a virtual boating accident. Upgraded, several different mining cards but still I am not cryptic enough to make the shit work. You young guys that know this shit like the back of your hand, Hats off to you. As for me... without some help fuck that dumb shit and the best of luck to you. I gave up and will NEVER return. Bitcoin is useless for me.

[mick silver]

i will say this one more time they know before most here know what there doing . they see far and wide . thanks ee

[Shami-Amourae]

The difference between you and I, you believe technology is our future and it's good.

I do see a divergence/split in the Truther community over this issue in the coming years. More of the older Truthers tend to distrust this stuff and the younger ones trust and use it more. Regardless we are all in the minority right now still and struggling just to live and try to be somewhat free.

Wait till humans start merging with machines. This is only starting. Here's a couple videos teasing it in the format of fake commercials advertising these technologies to the general public.

http://www.youtube.com/watch?v=UG_oThcYsn0

http://www.youtube.com/watch?v=Aij7dNUHQ9M

[Horn]

Now tell me, with this bitcoin wallet as the ONLY source of ID for the money, how is any IRS agent, any gov't agent, anyone in the world going to identify who's bitcoin wallet this is?


http://www.youtube.com/watch?v=7tch1CuMV9M

[dave60]

Edit by MF: spam deleted, spammer banned.

[madfranks]

i will say this one more time they know before most here know what there doing . they see far and wide . thanks ee

Not this. If the govt knew the success bitcoin would have a few years ago, no doubt they would have stopped it while they could have. You give the government too much credit, they are not omniscient nor omnipresent, and they didn't see this coming. I hold my bitcoins with as much confidence as I hold my gold and silver.

[mick silver]

mad your a good guy , i wish i could say more but i cannot . i see and hear alot theys days about stuff . thats just one more reason i dont come here that much anymore . i just wish i could say more

[Horn]

Edit by MF: spam deleted, spammer banned.

But dad it was silver spam...


http://www.youtube.com/watch?v=JNQ0GkGN3yM

[7th trump]

Why don't all of you naysayers actually try it out before you condemn it? You can get a bitcoin wallet for free, no name, no address, no phone number, no social security number, NOTHING. Just generate your own wallet, and it will be somehing like this:

31uEbMgunupShBVTewXjtqbBv5MndwfXhb

Now tell me, with this bitcoin wallet as the ONLY source of ID for the money, how is any IRS agent, any gov't agent, anyone in the world going to identify who's bitcoin wallet this is?

Real easy!
Your wallet will be identified when you go and pay for something.
The merchant if using bitcoin transactions will require the buyer to identify himself before any transaction takes place. That electronic transaction will be reported for a VAT like tax to be imposed.
If anything bitcoin will open the doors for VAT to become a piece of furniture in America's system of taxation.
Never waste an opportunity....just watch!

[Horn]

Word has it BitCoin is a finite creation,

the proceeds of which will be donated for North Korea's entrance into the Global Banking Cartel.

they will handle producing all the silicon necessary. [creative sarc. off]

[madfranks]

mad your a good guy , i wish i could say more but i cannot . i see and hear alot theys days about stuff . thats just one more reason i dont come here that much anymore . i just wish i could say more

You're a good guy too mick, I do wonder what you have to say though...

[madfranks]

Real easy!
Your wallet be identified when you go and pay for something.
The merchant if using bitcoin transactions will require the buyer to identify himself before any transaction takes place. That electronic transaction will be reported for a VAT like tax to be imposed.
If anything bitcoin will open the doors for VAT to become a piece of furniture in America's system of taxation.
Never waste an opportunity....just watch!

Ive bought a few things online with bitcoins and the merchants have never required me to identify myself, they only want to know where to send the merchandise.

Plus you can generate a new wallet for each and every transaction, if you want.

[Horn]

Ive bought a few things online with bitcoins

5034

http://bitcoinpride.com/t-shirts/classics/i-love-bitcoin-t-shirt-for-btc-lovers.html

[EE_]

Real easy!
Your wallet will be identified when you go and pay for something.
The merchant if using bitcoin transactions will require the buyer to identify himself before any transaction takes place. That electronic transaction will be reported for a VAT like tax to be imposed.
If anything bitcoin will open the doors for VAT to become a piece of furniture in America's system of taxation.
Never waste an opportunity....just watch!

Right...what if merchants and the places that give/take cash for bitcoins are barred from doing so by law? Then what?
You might be limited to only private barter with your bitcoins, but that will still leave a problem of getting cash in and out of them?

[Ares]

Real easy!
Your wallet will be identified when you go and pay for something.
The merchant if using bitcoin transactions will require the buyer to identify himself before any transaction takes place. That electronic transaction will be reported for a VAT like tax to be imposed.
If anything bitcoin will open the doors for VAT to become a piece of furniture in America's system of taxation.
Never waste an opportunity....just watch!

Also easy to counter. Each person can generate a new bitcoin address with each transaction. So, how do you track that down to an identity? I could easily claim plausible deniability about that address being mine. I don't know if that was my address. I have no previous use of that address, and my cell phone was lost around that time. If I have to give my ID. I still wouldn't know if that was my address. I configured the client to generate a new address for each transaction for security reasons.

That would be like the IRS trying to track down someone who creates and closes bank accounts with every transaction. How do you tax, track, or even attempt to gain revenue from such transactions?

Their only way would be through sales tax. Even that proves to be difficult if venders don't want to charge it, report it, or even want to take part in it. Craigs list, garage sales, and it gets even murkier with digital currencies.

[Horn]

Word has it BitCoin is a finite creation,

the proceeds of which will be donated for North Korea's entrance into the Global Banking Cartel.

they will handle producing all the silicon necessary. [creative sarc. off]


How porn links and Ben Bernanke snuck into Bitcoin's code

http://money.cnn.com/2013/05/02/technology/security/bitcoin-porn/index.html


(http://money.cnn.com/2013/05/02/technology/security/bitcoin-porn/index.html)North Korea signals openness to six-party talks

http://www.ft.com/intl/cms/s/0/c80a179c-d8f3-11e2-84fa-00144feab7de.html#axzz2WilMDbDW

(http://money.cnn.com/2013/05/02/technology/security/bitcoin-porn/index.html)

[7th trump]

Ive bought a few things online with bitcoins and the merchants have never required me to identify myself, they only want to know where to send the merchandise.

Plus you can generate a new wallet for each and every transaction, if you want.
Not yet they don't, but when uncle sam gets involved you will.
They'll change the electronic transaction wallet rules if needed......wait and see.

It'll be no different than using cash or credit card.
Go ahead and generate the bitcoin. The government will step in and regulate the mining to identify each and every bitcoin.
No different than having that strip in each note or a water mark.
And if a bitcoin doesn't have a unique government stamp the transaction doesn't take place.....don't forget commerce is the federal governments domain.

Bitcoin is wide open for anything the government wishes to regulate it with.

[Ares]

Not yet they don't, but when uncle sam gets involved you will.
They'll change the electronic transaction wallet rules if needed......wait and see.

How? Bitcoin is open source. Is the government going to start taking part in the development process? The way the ledger system works you have to be extremely careful if making changes to the code or you crash or fork (A new entirely different branch of the bitcoin ledger chain) the system. Also did I mention that all the Bitcoin users have to AGREE to use the new wallet in order for it to be valid? Wallet transaction rules are set within each version of the wallet. If they are not compatible, you're going to have to somehow convince the Bitcoin community all over the world to use that wallet. Good luck. :)


It'll be no different than using cash or credit card.

It is VERY different. Who issues bitcoins? Who controls it? Who manages bitcoins? Who stores bitcoins? Each one of those questions can be answered with cash and credit cards. They cannot be answered with Bitcoins or other alternative currencies because there is no one who issues, controls, manages or stores bitcoins.


Go ahead and generate the bitcoin. The government will step in and regulate the mining to identify each and every bitcoin.

Again you have no idea how the mining process works. There is pool mining, individual mining, group mining hidden, public and other wise. I've even placed my miner in the Tor network just to see if I could do it. It can be done, is slower than hell, but my miner could never be identified, let alone the coins being mined.


No different than having that strip in each note or a water mark.

They already do. Each bitcoin mined is unique and can be tracked through the ledger. Satashi solved the double spend problem by ensuring that no coin could be duplicated. So yes, it does have a "water mark" but we call it a unique cryptographic cypher.


And if a bitcoin doesn't have a unique government stamp the transaction doesn't take place.

Since they cannot control the issuance, storage, or even transactions as Bitcoins are borderless, how can the U.S. government put a stamp on a coin that was mined in China? Korea? Europe? Russia? etc. See the problem? This currency is used around the world, and if a coin is mined in china, it technically belongs to china. How can the U.S. government regulate it? They cannot regulate the yuan as that is China's to regulate, just as they cannot regulate the Euro. Governments are stuck between a rock and a hard place when it comes to digital currencies. Borderless, stateless, and bankerless. All good things whose time has come.


Bitcoin is wide open for anything the government wants to regulate it.

Wrong again, it is wide open for anyone to use and implement. It was designed from the ground up to be decentralized and a complex nightmare for regulation.

[Ponce]

If the government want their gallon of blood (tax) they will get their gallon of blood.....and the same way that a bank can steal your accout the bit coin can steal your account......I feel safer by what I am holding and not by what someone else is holding for me.

V

[madfranks]

If the government want their gallon of blood (tax) they will get their gallon of blood.....and the same way that a bank can steal your accout the bit coin can steal your account......I feel safer by what I am holding and not by what someone else is holding for me.

V

Ponce, you can hold your bitcoins yourself, even offline and disconnected from the internet. It's called cold storage; you load them onto a flash drive or a CD, then all your coins in your wallet file are offline and under your exclusive control. If you lose the flash drive or CD, you lose your digital wallet and your bitcoins, no different than losing your wallet in real life. Your sig says you'll never stop learning because you'll never stop reading, I suggest you do some learning and reading about bitcoins, I think you'll change your mind. Here's a good read to start: What the Government Doesn't Want You to Know About Bitcoins (http://lfb.org/files/2013/04/Bitcoins0413.pdf)

[Son-of-Liberty]

It's obvious that some of you just don't understand how Bitcoins work. I was very skeptical myself until I really started to dig into how it actually works. The government can see the transactions being made, in fact everyone can look at all the transactions. But they will have little success figuring out who is doing what because everything is anonymous and none of the businesses require you to identify yourself to do business. All they can see is an account # and you can change the one you use whenever you want.

IF they try to tax the sellers that accept bitcoin then everything will just move to TOR. The Silk Road (like ebay for drugs) which can only be reached using Tor is running just fine.

They can't seize control of Bitcoin from one central command point. There is no one person they could murder that would bring the system down. If they attack the network 1000's of nerds will figure out how to fix the problem and prevent it in the future. It is like a hydra that grows back two heads every time you chop one off.

Even if somehow they destroy Bitcoin the genie is out of the bottle. There are dozens of competing coins waiting to take it's place. This community has tasted what a true free market is like and won't give it up easily.

[Son-of-Liberty]

Double post.

[Horn]

Ponce, Do Not leave your memory stick in direct sunlight,

as it will vaporize all vampire BitCoins.

5035

If TSA can melt it, you don't own it.