IRS Shows Ten Thousand Weak Hands
When I first heard that the IRS sent out 10,000 letters to crypto holders threatening that they better not evade taxes, I felt like this was a very weak play. I didn't want to say anything until that hunch was confirmed by at least one article that I read. Well, that article is here:
https://news.bitcoin.com/reddit-roasts-the-irs-have-americas-tax-collectors-gone-crypto-fishing/
The throwaway account details the “really bad data” used by the agency, saying they’re operating mostly from guesswork, casting broad nets and leveraging fear to generate revenue.
... affirming that the IRS may be little more than a poorly run “fishing” scam of massive proportions.
The agency famous for long lines and severely understaffed offices, “courtesy disconnects” on the phone, and outdated, enragingly tedious filing procedures is now subject to even further criticism: how in the hell could they possibly deal with a fast-paced technology like crypto, when they can’t even process fiat taxes efficiently?
They’re not really sure if you owe more money or not since they have really bad data. They are almost certainly joining up some of their internal tax filing database tables with external datasets (probably coinbase) and trying to estimate how much they think you owe.
"I have paid 100k’s in taxes on crypto profits over the years. These scare tactics make me want to move to puerto rico 6 months of the year … because i hate playing a guessing game … and spending over a week working on this per year while i am constantly presumed to be guilty."
“It strikes me that this [cryptocurrency] letter writing campaign in particular is very unethical, as they’re blindly scaring thousands of people shitless who very well may have done absolutely nothing wrong. Many of these people will seek legal or professional tax help at a large cost to them … In a fair world they’d [the IRS] face a class action lawsuit for this predatory behavior.”
Conclusion
As artificial scarcity moves away from the physical world and into the digital one (crypto) we are going to see a lot of big changes around the world. People are going to start asking themselves what the state is doing for them to justify these taxes, and every year that goes by that list is going to shrink smaller and smaller.
Blockchain can replace traditional government. Why pay taxes in this archaic way when you can move to a crypto city-state where taxes are paid automatically through inflation?
The equivalence on Steem would be paying 10% to the witnesses. We don't have to think about it; it just happens. This will be the future of paying taxes (simple inflation agreed upon by the community). It will be superior in every way because the money flow will be transparent for all to see. Corruption will have a hard time taking root, especially with hundreds (thousands?) of other crypto cities in healthy "competition" with each other. People will want to live in the cities that have the most evolved governments.
The governments of the world think they can bottleneck this new technology through centralized exchanges in order to track what is going on. It's very obvious to me that this barrier will obviously be broken by a tidal wave of borderless use-cases going forward within the next ten years.
Good luck, IRS! You're going to need it.
What are you trying to tell me? That I can dodge taxes?
No, I'm trying to tell you that when you're ready, you won't have to.
And that's really the rub right there. Crypto is empowering the people and allowing individuals the same rights as banks and corporations. As we all know, megacorps don't really pay much (if any) taxes, and they do so legally. How long until crypto allows the people to do the same?
What often amazes me about governments is that looking for additional revenue through tax is always their solution as if they’re the most efficient spenders of money ever!
If they just looked internally I’m sure they could honestly plug some leaking holes and have enough money to meet their various tasks well within budget! They’re already printing heaps of fake money yet you still want mine?
I really hope crypto allows us to continue to opt out and that certain nations and states use it as an opportunity to create havens for people.
The money we save in tax is disposable income to spend creating jobs and businesses it’s a no brainer
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Yeah, the low number really suggests to me that maybe they don't really have much info at all. Ten thousand? Are these only the people with massive holdings? There are probably more people on Steem with their name out there.
This is the one part I really can't agree with you on. Corruption always finds a way. Maybe we will technically be able to pick cities that are run better...but will we? Or will we just live where we do and deal with it? After all, I could probably move a lot better places right now...but here I am...
It's hard to guess how an abundance model like open source currency is going to have an effect on the world economy. It's all wild speculation.
Crypto is all about community. Is it possible a community emerges that's full of brainwashed slaves getting duped just like before? Yes. It's called Ripple, Libra, and all the other Big Bank coins that don't even exist yet.
However, the new system is bound to have more options than the previous.
I think we can all be fairly certain of this.
I don't think that's necessarily how it will happen. Just look at Steem. It was started on all these supposed hopes and dreams...and then it just goes to shit...and yet we can't get them to bloody fix it. It's not like there haven't been a ton of ideas on how to fix it...it's just the setup is benefiting those with the most Steem and they discuss all the changes in private and don't have a lot of open source help, still. So they have to all agree on something, then start coding it. I think the only way to perhaps fix it would be to form a group of coders, modify the code, then just push it out there and see if they'll adopt it into a HF.
America is to a point where almost anything would be better. Almost nothing good gets done anymore. Even a monarchy might be better, because then maybe we'd have a role of the dice to maybe get a really good king occasionally that really gets shit done. Of course, we'd still have occasional fuckheads, but we do already. Maybe the good ones could maybe get a bit more done, then it would be too hard to change things without risking the anger of the people. Instead we just get changes in either direction so it's just mediocre-ly terrible.
The Infernal Revolting Syndicate's sole objective is extortion and terror.
And this letter fulfils both.
If they were truly about taxing cryptos, they would have firmly defined what a crypto-coin is and what a crypto-token is.
And then laid out definitive terms and examples of what is taxable.
Instead, they are playing both sides of the fence. Choosing whichever suits them best in the moment.
This is what they do. Terrorize people.
As a non-American, I find this so much fun!!
This is one reason why not being anonymous on Steem is not the greatest idea. If Steem grows into a really big thing one day, anyone identifiable on Steem may start getting letters like that. On the other hand, how Steem income is supposed to be taxed is anyone's guess. The tax guidelines where I live are worded in such a way as to allow for the possibility of Steem being treated like a MMOG (Massive Multi-player Online Game), in which case income earned on the platform would only be taxable when it is converted into fiat, cryptos external to it or goods or services. But you never know because those people who have asked about how Steem is supposed to be taxed haven't got any satisfactory answers. Those people who have asked have been taxed only on fiat they have received in exchange for STEEM at least to my knowledge. Another thing is that the platform is constantly evolving and may not meet the criteria for being treated like an MMOG for tax purposes. Because the tax authorities haven't based their answers on their own guidelines, there is a fair bit of uncertainty even now. This is why it is the safest choice to be anonymous.
Well said, @anonsteve.
I await the day that actual decentralized MMOs pop up here with coveted provably-owned digital assets.
I thought exactly the same no too long ago. Eventually, blockchain technology will change the way government is done. It will not be anymore the centralized platform that it is now.
When the time comes they'll go after what they determine to be the biggest fish who aren't paying taxes, it will be well publicized these people received letters, those people will be prosecuted and sent to prison as an example to the rest to pay up. You people really kill me with you think this crypto thing is untouchable, as I have said many times before it's only as untouchable as the top guy wants to go to jail for you....it's not going to happen.
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@edicted, When it comes to Taxes, in reality many don't have any idea about it when it comes to the practicality aspect. Due to Cryptocurrency and Blockchain space Transperancy will rise and then people will going to hold more clarity.
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Hi friend @edicted.
Government taxes are calculated based on your annual net earnings. Net earnings in "legal" currency.
So, if the state itself issues statements stating that cryptocurrencies are not "real money," then I do not explain how they intend to apply taxes.
They contradict and are exposed. They don't have a foundation ... yet.
The strategy of the letters seems to me to be an act close to terrorism.
All best, Piotr.