Pay Your Taxes - The IRS Has Special Software to Find Bitcoin Tax Cheats

in bitcoin •  last year

You may be familiar with a request that the IRS made to Coinbase, requesting U.S. account holder information. Coinbase resisted and the request was narrowed to U.S. account holders who had "...accounts that engaged in transactions worth $20,000 or more."

Has the IRS backed down? Are they only looking for big fish? Don't be fooled. The reality is that the IRS is paying a company called Chainanalysis to identify the owners of bitcoin wallets, so they can go after them for unpaid taxes.

Chainanalysis says they have information on 25% of all bitcoin addresses which account for 50% of all Bitcoin activity. They also say that they have deployed 4 million tags on bitcoin addresses that they've scraped from "web forums and leaked data sources." They also have deposit and withdrawal information from Mt. Gox.

Can you keep your identity concealed? Yes, if you maintain your own bitcoin wallet, use anonymous purchase methods, and avoid exchanges like Coinbase that collect customer data. For total peace of mind, consider paying taxes on profits.

As a side note, we may see a steady rise in the price of Monero. Monero transactions are harder to trace.


Image Source: Pixabay

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Informative post. Thanks!


You're welcome @nasgen15. Thanks for commenting.