Keep in mind that the IRS' primary tool of enforcement is fear - fear that you're going to get audited and screwed over. They say they can trace crypto, so you'd better declare that shit.
I am skeptical. They've yet to figure out how to keep the gibs-masters from getting a dozen stimulus checks at a shot.
Depends on your wallet. If your wallet is held or known by an official institution or something like that, then they might. Crypto is not secret, it’s highly traceable, but if you keep a few things secret they probably won’t know it’s you
Do one transfer from a KYC exchange to a local wallet, and all they know is that you bought and then sent it away. They can only assume or suspect that you now hold coins in a local wallet, but there's practically no way for them to prove it.
Here's a typical example of how they work:
Bank transaction to exchange is detected.
Exchange is based in the US and hands out your information and transaction history,
IRS now knows you bought and transferred to a local wallet, they suspect this wallet is yours but can't prove it
IRS and local police visits you for a hearing, all to scare you of course. They initiate by saying, "we know you bought crypto and transferred to your local wallet".
You think you're busted so you tell them everything
Here's what you should do instead, deny and act confused. Say something like "I have never heard of bitcorn". This will force them to reveal everything they know, i.e your bank flagged you, they traced the purchase.
You keep denying everything, you don't know nothing, and stay relaxed. Remember you got nothing to hide.
Now eventually they've laid out everything they got, and you still know nothing, keep in mind if you answer any question they will ask follow up questions, tricking you into saying something you shouldn't say.
At this point they might start to threaten you, don't fall for it, it's all a scam. Eventually they leave, maybe the threaten to take the case to court, but in reality they won't because without proof nobody would go to court.
And of course, while dealing with crypto in a totalitarian state you might wanna take some additional precautions to protect your identity.
I’ve heard of Bitcoin, but am not very trusting. Thought about mining in college, but was too busy. If it becomes a thing That’s needed I’ll have to learn more.
They absolutely can trace Bitcoin and nearly* all other cryptocurrencies. Being able to validate that chain of custody is how a wallet can prove its worth, and that unfortunately means that if you know who owns a given wallet, you know exactly how much money they have and who they've sent money to or received money from.
*The only cryptocurrency I know of that has solved this problem is Monero, and surprise surprise, the government and media have painted it as the currency of choice of illicit activity.
Bitcoin opens at $55.8k per each coin this morning. In 2013 I bought 5 coins for $200 each, then I lost them all in a ballistic boating accident out at sea.
Crypto currency is anonymous, I thought. They can't do jack shit.
When I was in the Air Force, we did a sandbox rotation after Desert Storm. Boredom got the best of us, and one evening, several of us gathered on the 7th floor of one of the Khobar Tower buildings, in a room that had a sideways view of the basketball courts across the street. Out comes the water balloon slingshot!!! By the third shot, the guy pulling back and launching was zeroed in, and was aiming it for the concrete about 3-4 feet in front of people's feet for maximum splash. Our First Sergeant went home with wet shoes and shorts that night, and the next day, on the flight line, he dressed us down during roll call, threatening that they know who all was involved, and if we 'fess up now, the punishment won't be as severe.
Yeah, if they really knew anything, those of us involved wouldn't have been standing in formation that day. This is the exact same ploy. They don't know who has crypto currency, and they'll never know, unless you report it.
This is similar to my state tax return asking me to pay taxes for things I've purchased online from other states. Uh huh, yeah, sure. I'll get right on that.
Anyone who happens to know your SSN could theoretically "borrow" your identity and do all kinds of shit in your name. You could always claim identity theft assuming you created your exchange account with a anonymous email address, a burner phone and are always logging in via VPN.
Sure, any US trading requires a SSN, but crypto transactions themselves are supposed to be anonymous. If you've acquired your crypto via trading, yeah, you're fucked in this situation, but if you've acquired it by using it as payment for services and goods, it's nobody's business who each party is, or how much crypto they have.
This is what has bothered me so much when it came to Bitcoin - it was supposed to replace other currencies, with its value based on it being a finite resource (the Fed can't fuck it up by just printing more) and two parties agreeing on how much in trade for whatever is being sold. As soon as it started to become legitimate, everyone started trading/selling it for dollars and other currencies, basing it's value on devalued forms of currency, negating its intended purpose.
Damon Rowe, the Director of the Office of Fraud Enforcement at the Internal Revenue Service announced yesterday at a Federal Bar Association presentation on fraud enforcement priorities that the office has “added some crown jewels,” including a dedicated team of IRS Criminal Investigation professionals who are working on “Operation Hidden Treasure.” Operation Hidden Treasure is comprised of agents who are trained in cryptocurrency and virtual currency tracking, and who are focused on taxpayers who omit cryptocurrency income from their tax returns. Operation Hidden Treasure is a partnership between the civil office of fraud enforcement and the criminal investigation unit to root out tax evasion from cryptocurrency owners.
I use Bitcoin dot tax, it's not very expensive, and it's easy to use. Spend a couple hours at the end of the year. Capital gains are not that bad... At least thanks to Trump, let's see what happens with the dementia patient.
Keep in mind that the IRS' primary tool of enforcement is fear - fear that you're going to get audited and screwed over. They say they can trace crypto, so you'd better declare that shit.
I am skeptical. They've yet to figure out how to keep the gibs-masters from getting a dozen stimulus checks at a shot.
Depends on your wallet. If your wallet is held or known by an official institution or something like that, then they might. Crypto is not secret, it’s highly traceable, but if you keep a few things secret they probably won’t know it’s you
Do one transfer from a KYC exchange to a local wallet, and all they know is that you bought and then sent it away. They can only assume or suspect that you now hold coins in a local wallet, but there's practically no way for them to prove it.
Here's a typical example of how they work:
Here's what you should do instead, deny and act confused. Say something like "I have never heard of bitcorn". This will force them to reveal everything they know, i.e your bank flagged you, they traced the purchase.
You keep denying everything, you don't know nothing, and stay relaxed. Remember you got nothing to hide.
Now eventually they've laid out everything they got, and you still know nothing, keep in mind if you answer any question they will ask follow up questions, tricking you into saying something you shouldn't say.
At this point they might start to threaten you, don't fall for it, it's all a scam. Eventually they leave, maybe the threaten to take the case to court, but in reality they won't because without proof nobody would go to court.
And of course, while dealing with crypto in a totalitarian state you might wanna take some additional precautions to protect your identity.
It's so casual you almost miss it.
I’ve heard of Bitcoin, but am not very trusting. Thought about mining in college, but was too busy. If it becomes a thing That’s needed I’ll have to learn more.
Bingo, almost fooled me there :)
They absolutely can trace Bitcoin and nearly* all other cryptocurrencies. Being able to validate that chain of custody is how a wallet can prove its worth, and that unfortunately means that if you know who owns a given wallet, you know exactly how much money they have and who they've sent money to or received money from.
*The only cryptocurrency I know of that has solved this problem is Monero, and surprise surprise, the government and media have painted it as the currency of choice of illicit activity.
True but still they have to connect the wallet to you
Bitcoin opens at $55.8k per each coin this morning. In 2013 I bought 5 coins for $200 each, then I lost them all in a ballistic boating accident out at sea.
Update:
Now at noon, 4 hours later it is $57.3K per coin.
Yeah, time to empty my bank account. Fuck the IRS . They are illegitimate
Crypto currency is anonymous, I thought. They can't do jack shit.
When I was in the Air Force, we did a sandbox rotation after Desert Storm. Boredom got the best of us, and one evening, several of us gathered on the 7th floor of one of the Khobar Tower buildings, in a room that had a sideways view of the basketball courts across the street. Out comes the water balloon slingshot!!! By the third shot, the guy pulling back and launching was zeroed in, and was aiming it for the concrete about 3-4 feet in front of people's feet for maximum splash. Our First Sergeant went home with wet shoes and shorts that night, and the next day, on the flight line, he dressed us down during roll call, threatening that they know who all was involved, and if we 'fess up now, the punishment won't be as severe.
Yeah, if they really knew anything, those of us involved wouldn't have been standing in formation that day. This is the exact same ploy. They don't know who has crypto currency, and they'll never know, unless you report it.
This is similar to my state tax return asking me to pay taxes for things I've purchased online from other states. Uh huh, yeah, sure. I'll get right on that.
US based crypto trading platforms require a SSN, so not sure how anonymous that can be
Anyone who happens to know your SSN could theoretically "borrow" your identity and do all kinds of shit in your name. You could always claim identity theft assuming you created your exchange account with a anonymous email address, a burner phone and are always logging in via VPN.
Coinbase was asking for a photo ID at signup. Gonna be a hard pass on that one. I went ahead and cancelled that account.
they all do AFAIK. I guess in theory you could VPN to a foreign crypto platform, but who knows what they will require, and if not how safe is it?
Sure, any US trading requires a SSN, but crypto transactions themselves are supposed to be anonymous. If you've acquired your crypto via trading, yeah, you're fucked in this situation, but if you've acquired it by using it as payment for services and goods, it's nobody's business who each party is, or how much crypto they have.
This is what has bothered me so much when it came to Bitcoin - it was supposed to replace other currencies, with its value based on it being a finite resource (the Fed can't fuck it up by just printing more) and two parties agreeing on how much in trade for whatever is being sold. As soon as it started to become legitimate, everyone started trading/selling it for dollars and other currencies, basing it's value on devalued forms of currency, negating its intended purpose.
US crypto platforms require as SSN??? No fucking way, is this true??
Damon Rowe, the Director of the Office of Fraud Enforcement at the Internal Revenue Service announced yesterday at a Federal Bar Association presentation on fraud enforcement priorities that the office has “added some crown jewels,” including a dedicated team of IRS Criminal Investigation professionals who are working on “Operation Hidden Treasure.” Operation Hidden Treasure is comprised of agents who are trained in cryptocurrency and virtual currency tracking, and who are focused on taxpayers who omit cryptocurrency income from their tax returns. Operation Hidden Treasure is a partnership between the civil office of fraud enforcement and the criminal investigation unit to root out tax evasion from cryptocurrency owners.
They won't rest until even your bowel movements are taxed.
I use Bitcoin dot tax, it's not very expensive, and it's easy to use. Spend a couple hours at the end of the year. Capital gains are not that bad... At least thanks to Trump, let's see what happens with the dementia patient.
Yeah, this illegitimate government isn't getting one satoshi from me.