[ExI] Bitcoins Again

[Gordon]

On Wed, May 15, 2013 at 07:37:43AM -0700, spike wrote:

>>>… Using bitcoin will likely put you on the IRS's radar, and they have constitutionally unlimited powers.

>>…I think we're a long way from the IRS having any real powers here…Gordon
 
>I respectfully disagree sir.  But we will see in the next few weeks.  

As I see it, the problem for the IRS is that there is currently no reporting. Trading in bitcoins is something like trading in baseball cards. It's almost untraceable. If you buy a BTC at $100 and sell it at $200, the tax code says you should pay tax on the $100 gain, (and you should), but the IRS would be hard-pressed to prove that you ever made that gain or even to know that you owned bitcoins in the first place. Nobody reports your purchase or your sale to the IRS. That may change down the road, but for now it looks to me like Bitcoin is mostly flying under the radar.

They are looking at regulating it, however. That is for sure. As it turns out, this Mt.Gox account at Dwolla that I mentioned was frozen because a subsidiary of Mt. Gox had failed to register an associated bank account as part of a money transfer system. My guess is that it was merely an oversight on the part of the owner of Mt.Gox, but I do wonder why the DHS thought it was worthy to pursue. They even had a "confidental informant".

Warrant Reveals Homeland Security Seized Mt. Gox’s Dwolla Account for ‘Unlicensed Money Transmitting’

http://betabeat.com/2013/05/warrant-reveals-department-of-homeland-security-seized-mt-goxs-dwolla-account-for-unlicensed-money-transmitting/


Gordon
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