The IRS has been using Bitcoin Tracking Software since 2015
It's no shocker that the U.S. government wants to get it's hands on digital currencies and track them. There's a lot of transactions that involve U.S. citizens that it wants to get hands on. The IRS has been using a software created by Chainanalysis to track transactions of users. According to the article, the IRS has paid Chainanalysis more than $88,000. This is not the first time the IRS has been stepping into crytpo, the IRS has been pushing Coindesk to release customer information. It doesn't help Coinbase that they were just labeled a Unicorn, or a private company valued at more that $1 billion. Coinbase has pushed back against the IRS, forcing them to narrow their information request. This narrower focus has the IRS agreeing to only view accounts that have more than $20,000 in transactions, leaving the smaller guys alone. Interesting news has developed recently as one of Coinbase's patents got approved by United States Patent and Trademark Office (USPTO). The patent is said to encompass a security methodology for private keys. It will allow for a safer and more secure way of storing private keys. This isn't the first to get approved, this is their fourth patent to date.
If you're wondering why the IRS wants more info on who is transacting in Bitcoin, I can tell you it might have to do something with the fact that only 802 people claimed capital gain or loss related to Bitcoin in 2015. Now I'm no rocket scientist, but I assume that there were a few thousand more people in the U.S. in 2015 who were using Bitcoins, and it was likely in the hundreds of thousands. Per Fortune, the article states the IRS is looking for Bitcoin users who transacted it between 2013 and 2015 when the price went between $13 to $1100. That is a lot of missing tax money for the government, so it's no shocker that they are out looking for it. It would be the same as if someone went and bought 1000 shares of Amazon back in 2009 and then now had cashed them out, the government would come looking for you fairly soon asking for it's share.
Below is a statement directly from the IRS papers concerning transactions in Bitcoin.
This is just another case for why you should always store your coins in cold storage that you own. At the end of the day it should be up to you to keep your digital assets safe. It just goes to show that Chainanalysis can view individual users wallets that are stored via exchanges such as Coinbase and Mt. Gox.
In the near future as cryptocurrency continues to grow at this rate, I'm sure we'll see more intrusions by the IRS to get their hands on unpaid capital gains taxes. If this gets to a Trillion dollar market cap, you can guarantee the IRS will be scrambling to recover any taxes it can from this space. Although I'm not a huge fan of taxes, you have to pay them. For those wishing to stay anonymous, they should store their own bitcoin (or cryptocurrency) in private wallet(s) and use exchanges that avoid collecting customer info.
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Disclaimer: This is not investment advice, always do your own research. It is very important to do your own analysis before making any investment based on your own personal circumstances.
It is true that we must pay our taxes to help the government build future infrastructure.
However, the way government has become is like they take the tax money for granted and do whatever they want with it and this keeps the population frustrated.
The lack of transparency, progress, unemployment rate, ... the list goes on where the government is lacking to make an impact.
How you want people to give the tax money happily? They know they won't get anything in return for this...
And the safest wallet, as you said, is the one we store our Bitcoins offline. There may be trace but they won't know who owns the wallet!
I completely understand where you are coming from with taxes and lack of transparency. You could say "down with the government, I don't want to pay my taxes." Great, but at some point if the government were to collapse we would have anarchy for a lot of things. Everyday things we take for granted like police, firemen, and other things would dissapear. We have roads, bridges, and other infrastructure that has to be maintained. Airline regulations would not exist, and we would have to define a new system to follow by. When people preach a civil war or society to collapse, I don't think many take implications of what that would have on civilization. Things like internet and electricity would be gone. This conversation right here on this platform, would be nonexistent if we have no civilization.
I'm a firm believer in a small, limited government, are bureaucracy has gotten out of hand here in the U.S. I do see hopefully in the future people realizing the democide and destruction governments have done over the past century. Schools never point fingers at the real causers of death and genocide over the 20th century. Just look up democide, it's how more people have died then any other cause.
Well said. Without a government, anarchy will take its place and we can go back till mastering fire again!
First time am hearing of democide and this is crazy scary how we are being manipulated!
But there should be an event or a catalyst that will force the government to stop taking on debt and dump it on the people to repay.
Am not against a government but take Switzerland for example. They have a form of government whereby citizens can challenge any federal laws through voting. Each state has it's own governance and the power is equally divided among 7 people.
Thank you! I definitely need to brush up on my fire making skills hahaha!
Democide is a word everyone should know, yet so little do.
It is crazy to think the US is in debt $20 trillion, and when will it go away. But it seems that all they can do is spend more money and ask for more taxes.
This is what is making today's economy unsustainable.
A new paradigm shift is on its way and Bitcoin is just the beginning!
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