US Based Binance or KuCoin Accounts Holders Facing Big Issues

Round up of Cryptocurrency News #10 Week 28/09 - 4/10

Hello and sorry all its been about a month since serious post. So what has happened this week? 1. Kucoin exchange was hacked for over $150 Million in Bitcoin. Bitfinex and Tether freezes $33 Million of stolen funds. Over this past week we have seen many cryptocurrencies on the exchange be released from the freeze. However, users are still waiting on the main cryptos to be released as KuCoin is working on their security of their platform to make sure it does not happen again. The hacker itself tried to dump his tokens over Binance... Good try lol https://news.bitcoin.com/kucoin-hack-17m-laundered-via-decentralized-exchanges-blockchain-analysis-firm-claims-this-can-still-be-traced/ (HOLY MOLY) https://news.bitcoin.com/kucoin-ceo-says-exchange-hack-suspects-found-204-million-recovered/ 2. Bitcoin outperforms Gold, Nasdaq, 10 year treasury and S&P 500. not surprising at all for us but still very interesting, Bitcoin is up 48% since the start of the year. It appears more people are becoming interested in cryptocurrency as Bitcoin continues to be the best performing asset not just in the past 10 years but of all time. On a more personal note, I was at a small gathering today (within covid restrictions) and I was just saying how i was really interested in cryptocurrency. For the first time ever everyone around me was really interested in what it was and how it worked also talked to a lot of my stock market friends and almost all have pulled out or thinking of pulling out. related: https://dailyhodl.com/2020/10/01/report-details-unprecedented-levels-of-wall-street-interest-in-bitcoin-and-cryptocurrency/ https://dailyhodl.com/2020/10/02/former-goldman-institutional-trader-says-large-investors-now-buying-bitcoin-and-gold-at-same-pace-heres-why/ 3. CBDC news - US federal reserve is actively working on the a digital dollar. From a previous post we know that the European Union is working on a Digital Euro and China is working on their own digital dollar. For me this is a bit of a worrying issue and seems like an upgrade for their own outdated systems completely removing the idea of decentralisation. In addition to this, I find it interesting that in Australia all cryptocurrency tax laws were written in late 2017/2018 and continues to be adapted. In Russia their are harsh penalties for unreported cryptocurrency holdings. In my controversial view I think the technology of blockchain can actually be used to recreate and rewrite a much better future through its innate abilities. we can avoid things like this: https://news.bitcoin.com/jpmorgan-fraud-billion-dollar-settlement/ 4. Highlights on cryptojacking - if you dont know what this is it is when a script or code runs on a computer to mine cryptocurrency using your computer resources. You can block these using other programs or scripts and being safe over the internet. 5. World economic forum names XRP as crypto asset most relevant in central bank digital currency space. Many partnerships in the space plus flare coming later. https://dailyhodl.com/2020/09/30/ripple-matchmaking-effort-discovered-featuring-170-financial-institutions-is-xrp-front-and-cente i definitely have a love hate relationship with XRP. 6. https://dailyhodl.com/2020/09/28/defi-movement-shatters-11000000000-in-total-crypto-assets-locked/ https://news.bitcoin.com/uniswap-captures-2-billion-locked-dex-volume-outpaces-second-largest-centralized-exchange/ 7. https://www.ey.com/en_au/blockchain/blockchain-platforms 8. https://dailyhodl.com/2020/09/29/twitter-ceo-jack-dorsey-says-bitcoin-and-blockchain-will-fuel-financial-freedom-and-transform-future-of-content-delivery/ 9. https://news.bitcoin.com/easily-spend-your-bitcoin-via-prepaid-debit-card-or-a-paypal-account-with-bitcoin-of-americas-easy-to-use-trading-platform/ 10. https://news.bitcoin.com/bitcoin-com-exchange-to-list-aspire-and-aspire-gas-as-newest-digital-asset-creation-platform-comes-to-market/ 11. https://news.bitcoin.com/onecoin-victims-petition-establishment-european-crypto-fraud-compensation-fund/ 12. https://news.bitcoin.com/atari-announces-ieo-collaboration-and-listing-of-the-atari-token-with-bitcoin-com-exchange/ Atari also partners with Cryptocurrency project ULTRA. Don't sleep on NFT projects, they may be a niche but they help with organisation, collectability and simplifies processes. 13. https://news.bitcoin.com/aurus-disrupts-the-gold-industry-today-its-ecosystem-lists-at-a-value-of-75m/ 14. https://dailyhodl.com/2020/10/01/irs-deploying-two-firms-to-track-crypto-transactions-in-million-dollar-deal/ 15. https://dailyhodl.com/2020/10/01/number-of-crypto-users-shatters-100000000-worldwide-cambridge-study/ https://news.bitcoin.com/bitcoin-posts-a-66-day-consecutive-streak-above-the-10k-price-range/ 16. https://news.bitcoin.com/cryptocurrency-exchange-diginex-trading-nasdaq/ 17. https://news.bitcoin.com/smart-contract-protocol-rsk-attempts-to-bring-defi-to-the-bitcoin-network/ 18. Bitmex news: https://news.bitcoin.com/bitmex-criminal-charges-prison/ well this happened. https://news.bitcoin.com/open-interest-on-bitmex-drops-16-investors-withdraw-37000-btc-in-less-than-24-hours/ https://dailyhodl.com/2020/10/02/bitmex-fires-back-after-us-accuses-crypto-exchange-of-failing-to-prevent-money-fraud/ https://dailyhodl.com/2020/10/03/440000000-in-bitcoin-exits-bitmex-as-crypto-traders-respond-to-cftc-allegations/ 19. Contract to break monero privacy: https://news.bitcoin.com/chainalysis-and-integra-win-1-25-million-irs-contract-to-break-monero/ 20. https://news.bitcoin.com/stacking-satoshis-leveraging-defi-applications-to-earn-more-bitcoin/ 21. https://dailyhodl.com/2020/10/02/bitcoin-whale-issues-big-warning-to-traders-heres-why-he-believes-group-of-crypto-assets-are-at-risk-from-regulators/ 22. https://news.bitcoin.com/venezuelas-state-run-defi-crypto-exchange-goes-live-after-maduros-anti-blockade-speech/ 23. https://news.bitcoin.com/crypto-exchange-coinbase-hands-over-customer-data-to-uk-tax-authority/ 24. https://news.bitcoin.com/jeff-booth-bitcoin-price-of-tomorrow/
25. https://news.bitcoin.com/eth-volumes-top-125-billion-in-q3-high-risk-dapps-dominate-tron-network/ 
Here is a small cross post for price movement: https://dailyhodl.com/2020/09/30/bitcoin-btc-tezos-xtz-cardano-ada-etoro-crypto-roundup/
Seems like everyone is bullish on bitcoin and leading crypto projects to make big gains over the next year, sooner rather than later. Bitcoin also holds above $10.5K with over 1Million wallets. Bitcoin interest is gaining throughout the world as many parts are hit by economic crisis.
Ethereum 2.0 roadmap updated, plans to exponentially increase scalability! VERY BULLISH. https://dailyhodl.com/2020/10/03/vitalik-buterin-updates-ethereum-2-0-roadmap-details-plans-to-exponentially-increase-scalability/
submitted by IOTAbesomewhere to Gravychain [link] [comments]

[WRITEUP] Criticism of r/privacy and r/privacytoolsio moderation censorship and how Apple/Brave/Chrome/GrapheneOS cult armies are destroying privacy communities

Hello! I wanted to discuss this on the soon-to-come occasion of 400 subscribers (398 as I write this), but I guess I will do it now, since the time is just right. This is a long post, so embrace yourself. This is an untalked topic, and you will rarely, if ever, find a record or post about the same.
Censorship in privacy communities is ironic, especially when the communities stand as the biggest ones on reddit. A lot of voices either go silent by account deletion and reappearing as new usernames, or they never speak up since they have been effectively "banned" so have no representation. A lot of this can be easily credited to folks breaking rules, which moderation would claim is certainly a need to manage large public forums. However, there is a section of people who criticise the Apple/Brave/Chrome/GrapheneOS cult armies, and this is where the problem starts to rise.

THE FOUR CULT ANTI-PRIVACY ARMIES

APPLE

Apple cult armies are in denial of Apple devices being privacy nightmares due to being closed source blackboxes. These are good for no more than protecting your data from your nosy girlfriend or the neighbour computer whiz kid.
There is plenty of evidence that goes to prove why Apple devices are nightmares for privacy. This is a comprehensive list of links, images and articles for read:
https://gist.github.com/iosecure/357e724811fe04167332ef54e736670d
https://i.imgur.com/n8Bk0bA.jpg
Siri still recording conversations 9 months later despite Apple's promise to not do it: https://www.theregister.co.uk/2020/05/20/apple_siri_transcriptions/
Apple Mail vulnerability, and Apple's denial of acceptance of the flaw: https://9to5mac.com/2020/04/27/iphone-mail-vulnerabilities-2/
Apple sells certificates to third-party developers that allow them to track users: https://www.theatlantic.com/technology/archive/2019/01/apples-hypocritical-defense-data-privacy/581680/
Apple themselves were one of the main partners buying data from Facebook: https://www.nytimes.com/interactive/2018/06/03/technology/facebook-device-partners-users-friends-data.html
The San Ferdandino shooter thing was completely fraudulent: https://www.aclu.org/blog/privacy-technology/internet-privacy/one-fbis-major-claims-iphone-case-fraudulent
Louis Rossmann dismantles Apple's PR stunt "repair program": https://invidio.us/watch?v=rwgpTDluufY

Brave

Brave Browser is funded by DoD: https://np.reddit.com/privatelife/comments/fe34ls/exclusive_brave_browser_funded_by_dod_contracto
Brave traffic detected with Cryptocompare despite BAT rewards disabled: https://removeddit.com/privacytoolsIO/comments/gr8nue/
Brave also has a known history of whitelisting Facebook and Twitter trackers, and has a crippled adblocker that does not work on Brave's "acceptable" advertisements.
NEW EVIDENCE (June 6, 2020): Brave Browser hardcoded their crypto partner Binance referral links (https://twitter.com/cryptonator1337/status/1269201480105578496) alongwith Ledger and soon-to-be-compromised Coinbase (https://decrypt.co/31461/coinbase-wants-to-identify-bitcoin-users-for-dea-irs)

Chrome

These people are partly joint with the GrapheneOS cult, primarily due to its lead developer orchestrating all these things in hindsight and his followers purposely sharing his opinion garbage as "facts".
Most of this was debunked by u/saintjohnny (no longer on reddit) here: https://removeddit.com/firefox/comments/gokcis/
Ridiculous things like lead developer accusing firefox of being a "deployed" army against him and 4chan being used to harm his image: https://i.postimg.cc/3RwLT8Nj/Screenshot-from-2020-05-26-23-10-20.png

GrapheneOS

The moderator u trai_dep has taken his time to censor me off completely, so that none of my criticisms can be ever read about his dictatorial moderation and the GrapheneOS discussion I had with its lead developer, who at the end gave me plenty evidence about his rudeness, ironically which was against the rules of the subreddit.
https://removeddit.com/privacytoolsIO/comments/gs4uv7/_/fs2ysdm/
Criticism of GrapheneOS lies on one of his comments about OnePlus and Xiaomi apparently not making good enough devices: https://np.reddit.com/privacytoolsIO/comments/gs4uv7/i_dont_fully_trust_grapheneos/fs82fdv/
There is also the issue that he always claims Google Pixel 3/3a is a must with Titan M chip running non verifiable code that one has to rely on for Google's claim of being same as open sourced code, and that it does not have spyware. And he maintains his stand about developing the ROM exclusively for the Pixel devices, which also house Pixel Visual Core, a proprietary Google-only CPU+GPU unit independent of the Snapdragon SoC and with negligible documentation claimed "only" to be used for HDR+ camera algorithm processing. Google has had a history of lying with things like the Location History toggle, or their known data collection business and known relationship with NSA.

EVIDENCE RECORD

I have managed to collect and create what is an evidence record establishing the fact that select moderators either have some kind of agenda or are destroying the privacy community as a whole on the internet itself.
The below large part is a direct copy of the "Criticism of..." section in my Threat Model writeup in the sidebar.

OTHER ISSUES, CRITICISM OF MODERATION OF R_PRIVACY

Telling me that I am a burden to the subreddit is outright super offensive, in my most humble opinion. Moreover, they have a strong opinionated bias towards Apple (here too), however no reason to complain for their opinions if they talk outside /privacy and /privacytoolsIO where they moderate. Take the mod hat off if you want. To their credit, one of them did confirm they have a light threat model and primary goal is to thwart mass surveillance, around Level 3 in my book.
You will always be criticised for complaining about US and rationally judging Chinese technology, and effectively repeatedly banned by American moderators and muted from modmail everytime you complain about people personally name calling you "Chinese intelligence proponent" or "Chinese/Huawei plant" or "idiot".
I cannot make text posts anymore in that subreddit as of 11/02/2020.
Lots of evidence events happened followed after my smartphone guide linked above: https://imgur.com/a/TqOkQk6
In atomicratsen image, you can see proof of them allowing Sinophobic propaganda in the name of arguments, followed by the last image. So that is another thing allowed here.
Below comment is the admission of being lazy, incompetent and calling actual gilded contributor users "burden": https://np.reddit.com/privacy/comments/enoui9/5_reasons_not_to_use_whatsapp/fe6qgd7/ Just in case comment goes poof, screenshot.
Moreover, one of them made it clear in modmail that Sinophobic propaganda are "arguments" and will go uncriticised, likely patriotism owing to a global subreddit's moderation which seems unfair and caters not to all but to favouritism to a larger US/West EU audience on reddit, as said earlier:
The thing is, making an argument that China is shady is that: an argument. I mean, geez: Hong Kong. Enough said. So long as they're being civil about it, it's actually what this Sub is for.
Do you mention anything related to China or their products in your post? If so, it's fair game, and we expect everyone to conduct themselves like rational adults.
I'll check out the reports, but if they're conducting themselves along the lines of our sidebar rules, I (obviously) won't be taking any action. But I also hope that you don't get drawn into arguments that might end up earning yourself a time-out. We're somewhat patient, but at the same time, we can't spend too many man-hours tending a particular subscriber too much. Our time is volunteered and there are 600K+ subscribers. It's not fair to them.
Is this all fair to me, a cooperating member? If moderation and volunteering time is such a great issue, it would be a good step to take a backseat and discuss this in a rational non-prejudiced and less authoritarian manner. Why not allow others to take part and aid in moderating that subreddit?
They have repeatedly banned me for nonsensical reasons, standing on last warning, and will likely do so after this post (once for claiming this comment means I called the user asshat instead of their comment, when it never violated /privacy 's rule 5, and another comment where I said to use Win 7/8.1 instead of Win 10, mods claimed it as gatekeeping and banned me for 14 days because I am criticising some things they truly love).
New evidence as of few days ago (Feb 11, 2020): https://i.imgur.com/vOyaidS.png

NEW EVIDENCE

(May 31, 2020)

https://np.reddit.com/privacytoolsIO/comments/gtd3pl/fsb0m7f/ Use removeddit or snew.github.io in case the moderator deletes my comments. The modmail message thread (https://i.imgur.com/JwYaGJU.jpg) and my now shadowbanned comment (https://i.imgur.com/uUrMqyk.png).

NEW EVIDENCE

(June 10, 2020)

The moderator trai_dep now wants a sitewide ban on me for what is informing a reddit user of legitimate logical criticism of GrapheneOS. He calls this harassment, as he has done this multiple times with me in the past (unfortunately for which comments are deleted and evidence not being able to be recorded). However, this is taking it too far. https://i.imgur.com/dX73ZNX.png

NEW EVIDENCE

(June 15, 2020)

trai_dep revengefully deletes my famous gilded smartphone hardening no root guide with 1400+ votes. Modmail proofs post with timestamps: https://old.reddit.com/privatelife/comments/h8hsdh/exclusive_rprivacy_moderator_deleted_smartphone/

SELF TAKE ON THE MATTER

This happened with me on privacy, which is a major why I started this community. There must exist a place free of prejudiced bias and free of any forms of bigotry for privacy, truth and freedom loving folks. The fact that the moderators can get away with it by saying nice words after the ban reeks of a dictator that loves to give speech about care of its citizens, yet will slice anyone up. trai_dep and his friends continue to support the bigotry and these cult armies, which is likely because they do not understand nearly any higher order of technical aspect of privacy threat modelling, and have got no education on the same.

CONCLUSION

Privacy communities on reddit are a huge problem when it comes to dealing with the cult brigading, and instead critics are targeted by the cult armies which are let loose in these very communities. privacy and /privacytoolsIO are not true representatives of communities giving good advice for higher privacy and security, unfortunately ruined both by the moderators (many of whom are iPhone users themselves just like trai_dep) and the cult brigade armies.
submitted by TheAnonymouseJoker to privatelife [link] [comments]

Weekly Update: 5th Parachute League, Constellation + Splunk, Limit Orders on Voyager, SwitchDex update…– 12 Jun – 18 Jun'20

Weekly Update: 5th Parachute League, Constellation + Splunk, Limit Orders on Voyager, SwitchDex update…– 12 Jun – 18 Jun'20
Sup folks! Continuing with our six-part catch up series to get up to date on the May and June news from Parachute and partners, here’s Part V of VI (12 Jun – 18 Jun'20):

Jason's #fridayprompt for this week got Parachuters to "look at a holiday or major event celebrated in your nation" and talk about "the significance, how it evolved and what happens during the event or holiday". Tiproom crew launched a video contest for the best tutorial on how Crypto Leagues works. The 5th Parachute League with a 100k $PAR prize pot was launched this week. Naj hosted a fun trivia in TTR for 10k $PAR in prizes. Peace Love’s “Big Trivia” this week was based on general knowledge. Congratulations to Babywolf for winning this week’s Parena and taking home a boatload of $PAR. Saweet! This week’s Two-for-Tuesday was themed on rock and metal bands. If you’ve been in Parachute for a while, you’ll know that Parachuters across the world love sharing pictures from their daily lives in the chat. Here are some snippets they shared this week:
What a welcome sight amidst all this gloom and doom indeed, LordHades! Location: Black Sea
Some glimpses from Alexis’ and Carlos’ aquariums
Dang! What a view. Pic credits: Chris
In Hydro educational content this week, the team published articles on what an E-Money License was and a guide to prepaid card regulations. Mastercard did a shoutout to the PaaS report which was released 2 weeks back. And congratulations for getting listed in the Top Fintech Startups of 2020 list compiled by Business Insider. Amazing achievement! SelfKey published a guide to crypto lending in the US and an article on the benefits of crypto lending. While Constellation hasn’t made a public announcement yet, it seems like they have entered into a partnership with tech giant Splunk. Pynk’s Head of Investor Relations Miguel Ortiz penned an article on how the current financial system is skewed. Wibson crew attended an online Techqueria event on privacy this week. The team will be presenting at the next event. A chapter on Wibson has been included in a newly released book by Springer Nature titled Blockchain and Distributed Ledger Technology Use Cases. If you missed the Harmony AMA with Binance this week, you can read the transcript here. 1k USD worth of $ONE were given away. Sweet! And what an amazing edit for Justin Bieber fans. Haha! The weekly PoW thread can be read here. Harmony has climbed to the second position in overall score on the Staking Rewards platform. The team sat down for an AMA with Trust this week. Click here to catch up. They appeared for another AMA with Sesameseed as well. The entire session can be re-watched here. Covalent featured the project in its latest podcast. $ONE got listed on Switchain. Sesameseed started a staking campaign to reward $ONE delegators. Folks new to Intellishare can get acquainted with the project from their latest article. As GET Protocol’s Q2 2020 token burn event comes closer, the community got down to guessing the burn amount for a crack at 250 $GET in prizes. GET Protocol’s ticketing platform GUTS Tickets announced that it will be ticketing Woodkid’s Amsterdam event in Jan 2021.
The Mycro Hunter landing page looks fresh in case you haven’t checked it out yet
Click here and here to track the latest AXPR burns. 2gether founder Salvador Casquero was invited to the First Movers show on Capital Radio where he spoke about how the platform is innovating in fintech during the pandemic. CEO Ramon Ferraz appeared for the Territory BTC podcast to talk about the market in general and the growth of 2gether. YouTuber Bitcoin Sin Fronteras posted a video on how easy it was to buy crypto on 2gether. Quinten Francois of the Young and Investing YouTube channel also did a detailed review of the app. In #XIOSocial discussions this week, Citizens pondered over the semantics and economics of the XIO dApp staking fees. BIrdchain crew published an article on how to grow a business with SMS messages. Bounty0x's Jordan Smith spoke at the Run for the Unicorns event hosted by Silica Nexus. Limit orders went live on Voyager this week based on community feedback. So the team opened up another survey to take inputs on new features. The latest version of SwitchDex and McAfeeDex went live this week. Fantom released a general update to cover all the recent news from the dev front. The release schedule of its DeFi suite, Fantom Finance, was published as well. Alpha Sigma Capital covered Uptrennd in its research coverage of in-focus projects. GDA Capital released an extensive report on the project too. Founder Jeff Kirdeikis sat down for an interview with Best Bitcoin Casino. The team is on a hiring spree in case you are looking for a gig. Click here to read the latest weekly update from District0x. Among the new items covered are dev updates to Meme Factory and other districts, ongoing Ethlance remake etc. COTI laid out its wallet strategy and how it aims to build adoption for Viper in a detailed post this week.

And with that, we have to close for this week in the Parachutesphere! See you again with another update. Cheerio!
submitted by abhijoysarkar to ParachuteToken [link] [comments]

Round up of Cryptocurrency News #2 Week 13/07 - 19/07

Round up of Cryptocurrency News #2 Week 13/07 - 19/07
So much has happened this week! We saw a capitulation point of bitcoin before bears took over and we saw the selling pressure push Bitcoin down toward the $9000USD mark then move back up above $9100USD So far it has been a stable hold, however we may see some more action within the coming weeks.
 
Widespread scamming within the Twitter-sphere, Youtube and other platforms as Bitcoin and other cryptocurrencies may seem like fair game. Cryptocurrencies providing big payouts for scammers without the ability for reversals of accounts. Remember if something seems too good to be true, do some research or just plain do not respond/believe it. Stay safe and careful with your funds!
 
On the brightside, there has been even more adoption of cryptocurrencies as rumours of Paypal utilising cryptocurrency has been confirmed as they are developing crypto capabilities. In addition to this we received exciting news at the start of this week about Binance partnering with Swipe (SXP) and offering a debit card to spend BNB, SXP, BTC and BUSD. ( I will be keeping a swift eye on BNB and Swipe as its utilisation as tokens has just increased 43 fold).
 
Positive news for the Bitcoin network as its hashrate reaches all time high which helps to secure the network further even though mining profits have dropped by 50% from the recent halving. If you didn't know already the last Bitcoin will be expected to be mined in 2140 with its difficulty ever increasing and each time securing the network further. Processing units will have to become faster, stronger and most importantly more cost effective to continue to entice miners for the block rewards and further renewable energy practices.
 
Furthermore we can see Central banks and countries discussing and developing Central Bank Digital Currencies (CBDC). Read more about it here https://www.investopedia.com/terms/c/central-bank-digital-currency-cbdc.asp and check out some of the developments in the world above. This shows the popularity and strong nature of cryptocurrencies. As the saying goes "If you cant beat them, JOIN them".
 
Overall, very solid week full of adoption, animation and anticipation. Another post next week for a weekly round up! See you then but in the mean time join us at our Gravychain Discord.
- DISCORD LINK: https://discord.gg/zxXXyuJ 🍕 Bring some virtual pizza to share 🍕
Come have a chat, stimulate a discussion, ask a question or share some knowledge. We are all friendly crypto enthusiasts up for a chat, supportive and want to help each other with knowledge and investments!
Big thanks to our Telegram and My Crypto HQ for the constant news updates! - The Gravychain Collective: https://t.me/gravychain - My Crypto HQ: https://t.me/My_Crypto_HQ
Important/Notable/Highlights:

Special Mentions:
Other:
submitted by IOTAbesomewhere to Gravychain [link] [comments]

Introducing The Cryptocurrency Informer

Hey all,
We are trying something new. Full disclosure, I work for BitcoinTaxes, and I am the host of the new podcast I am here to talk about.
News happens in the world of cryptocurrency at a rapid pace. Every day something new and innovative is announced, that expands on existing technologies. The Cryptocurrency Informer is a weekly update series highlighting notable events happening in the crypto and crypto-adjacent spaces. Each episode provides a brief summary of these events, and an accompanying blog post provides sources for each story, so our listeners can dig deep on the things they want to know more about.
In the first episode of The Cryptocurrency Informer, we discuss the effects of the COVID-19 outbreak on tax deadlines and federally backed cryptocurrencies. Binance has released it’s new “Binance Card”, and Mt.Gox creditors may be getting closer to a payout.
Podcast Links:
Podcast Page
Direct Episode Link
Info Links:

IRS Moves Tax Deadline To July 15th

Notice 2020-18 – Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic
Filing and Payment Deadlines Questions and Answers

“Digital Dollar” and “Digital Dollar Wallet” Mentioned In Stimulus

Stimulus Draft
Forbes – Central Bank Currency on Ethereum
Technology Review – FedAccounts

Chinese Central Bank Digital Currency

Global Times Report

Binance Releases The Binance Card (Beta)

Binance Blog
Binance Card Registration Page

Mt. Gox Draft Rehabilitation Plan Released

*Creditor Portal Login (View Documents)
Coindesk Report
* Please use your best judgement when providing login information. The Creditor Portal Login link was provided via update on Mt. Gox's page. A PDF of this annoncement can be found here.
---
Hopefully you guys enjoy this kind of content. We'll still be releasing normal episodes of The BitcoinTaxes Podcast soon, but this will be an additional series that we release now as well.
submitted by Sal-BitcoinTax to bitcointaxes [link] [comments]

US Tax Guide for ETH and other cryptocurrencies

Introduction:  
Greetings, fellow ethtraders! Happy New Year! In the next few months, taxpayers across the US will be filing their 2017 tax returns. As an Enrolled Agent and a ETH/cryptocurrency investor and enthusiast, I wanted to write up a brief guide on how your investments in ETH and other cryptocurrencies are taxed in the US.
 
 
1. Are ETH/cryptocurrency realized gains taxable?
Yes. The IRS treats virtual currency (such as cryptocurrency) as property. That means if you sell ETH, BTC, or any other cryptocurrency that has appreciated in value, you have realized a capital gain and must pay taxes on this income. If you held the position for one year or less, it is a short-term capital gain which is taxed at your ordinary income tax rate. If you held the position for more than one year, it is a long-term capital gain which is taxed at your long-term capital gains tax rate. In most cases, this is 15%, but could also be 0% or 20% depending on your specific ordinary income tax bracket.
 
2. If I sell my ETH for USD on Coinbase but do not transfer the USD from Coinbase to my bank account, am I still taxed?
Yes. The only thing that matters is that you sold the ETH, which creates a taxable transaction. Whether you transfer the USD to your bank account or not does not matter.
 
3. If I use my ETH to buy OMG or another cryptocurrency, is this a taxable transaction?
Most likely yes. See #4 below for a more detailed explanation. If assuming crypto to crypto trades are not able to be like-kind exchanged, then continue on to the next paragraph here.
This is actually two different transactions. The first transaction is selling your ETH for USD. The second transaction is buying the OMG with your USD. You must manually calculate these amounts. For example, I buy 1 ETH for $600 on Coinbase. Later on, the price of 1 ETH rises to $700. I transfer that 1 ETH to Bittrex and use it to buy 37 OMG. I have to report a capital gain of $100 because of this transaction. My total cost basis for the 37 OMG I purchased is $700.
 
4. If I use my ETH to buy OMG or other cryptocurrency, could that be considered a tax-free like-kind exchange?
Probably not. The new tax law says that like-kind exchanges only pertain to real estate transactions. This was done with Section 13303, which replaced “property” with “real property” for all of Section 1031 (page 72 near the bottom). My personal interpretation:
In 2018 and going forward, cryptocurrencies can definitely not be like-kind exchanged.
In 2017 and before, it is a very gray area. I personally am not taking the position that they can be like-kind exchanged, because if the IRS went after a taxpayer who did this, the IRS would probably win and the taxpayer would owe taxes, interest, and probably penalties on every single little gain made from trading one cryptocurrency for another.
Here is a great interpretation of why trading cryptocurrency for cryptocurrency is probably not a like-kind transaction.
In my opinion, the biggest factor is that like-kind exchanges must be reported on Form 8824 and not just ignored. Therefore, if a taxpayer is claiming like-kind exchanges on crypto to crypto exchanges, he or she would have to fill out a Form 8824 for each individual transaction of crypto to crypto, which would be absolutely cumbersome if there are hundreds or thousands of such trades.
Here is another article about like-kind exchanges.
Here is the American Institute of CPAs' letter to the IRS, dated June 10, 2016, asking them to release guidance on whether crypto to crypto can be like-kind exchanged or not. The IRS has not responded to the letter.
 
5. How do I calculate the realized capital gain or loss on the sale of my cryptocurrency?
The realized gain or loss is your total proceeds from the sale minus what you purchased those positions for (your cost basis). For example, you bought 1 ETH for $300 in June of 2017. In December of 2017, you sold that 1 ETH for $800. Your realized gain would be $800 - $300 = $500. Since you held it for one year or less, the $500 would be a short-term capital gain taxed at your ordinary income tax rate.
 
6. Which ETH's cost basis do I use if I have multiple purchases?
The cost basis reporting method is up to you. For example, I buy my first ETH at $300, a second ETH at $530, and a third ETH at $400. Later on, I sell one ETH for $800. I can use:
FIFO (first in first out) - cost basis would the first ETH, $300, which would result in a gain of $500.
LIFO (last in first out) - cost basis would be the third ETH, $400, which would result in a gain of $400.
Average cost - cost basis would be the average of the three ETH, $410, which would result in a gain of $390.
Specific identification - I can just choose which coin's cost basis to use. For example, I can choose the second ETH's cost basis, $530, which would result in the lowest capital gains possible of $270.
 
7. If I end up with a net capital loss, can I claim this on my tax return?
Capital gains and capital losses are netted on your tax return. If the net result of this is a capital loss, you may offset it against ordinary income on your tax return, but only at a maximum of $3,000 per year. The remaining losses are carried forward until you use them up.
 
8. What is the tax rate on my capital gains?
If long-term, the tax rate is 0%, 15%, or 20%, depending on your ordinary income tax bracket. If short-term, the tax bracket you’ll be in will depend on your total income and deductions. The ordinary income tax brackets are 10%, 15%, 25%, 28%, 33%, 35%, and 39.6% in 2017 and 10%, 12%, 22%, 24%, 32%, 35%, and 37% in 2018 and going forward.
Here are the 2017 and 2018 ordinary income tax brackets.
Here are the 2017 and 2018 long-term capital gains tax brackets.
Here is a detailed article on how the calculation of long-term capital gains tax work and how you can take advantage of the 0% long-term capital gains rate, if applicable.
 
9. If I mine ETH or any other cryptocurrency, is this taxable?
Yes. IRS Notice 2014-21 states that mining cryptocurrency is taxable. For example, if you mined $7,000 worth of ETH in 2017, you must report $7,000 of income on your 2017 tax return. For many taxpayers, this will be reported on your Schedule C, and you will most likely owe self-employment taxes on this income as well. The $7,000 becomes the cost basis in your ETH position.
 
10. How do I calculate income for the cryptocurrency I mined?
This is the approach I would take. Say I mined 1 ETH on December 31, 2017. I would look up the daily historical prices for ETH and average the high and low prices for ETH on December 31, 2017, which is ($760.35 + $710.12) / 2 = $735.24. I would report $735.24 of income on my tax return. This would also be the cost basis of the 1 ETH I mined.
 
11. Can I deduct mining expenses on my tax return?
If you are reporting the income from mining on Schedule C, then you can deduct expenses on Schedule C as well. You can deduct the portion of your electricity costs allocated to mining, and then you depreciate the cost of your mining rig over time (probably over five years). Section 179 also allows for the full deduction of the cost of certain equipment in year 1, so you could choose to do that if you wanted to instead.
 
12. If I receive ETH or other cryptocurrency as a payment for my business, is this taxable?
Yes. Similar to mining, your income would be what the value of the coins you received was. This would also be your cost basis in the coins.
 
13. If I received Bitcoin Cash as a result of the hard fork on August 1, 2017, is this taxable?
Most likely yes. For example, if you owned 1 Bitcoin and received 1 Bitcoin Cash on August 1, 2017 as a result of the hard fork, your income would be the value of 1 Bitcoin Cash on that date. Bitcoin.tax uses a value of $277. This value would also be your cost basis in the position. Any other hard forks would probably be treated similarly. Airdrops may be treated similarly as well, in the IRS' view.
Here are a couple more good articles about reporting the Bitcoin Cash fork as taxable ordinary income. The second one goes into depth and cites a US Supreme Court decision as precedent: one, two
 
14. If I use ETH, BTC, or other cryptocurrency to purchase goods or services, is this a taxable transaction?
Yes. It would be treated as selling your cryptocurrency for USD, and then using that USD to purchase those goods or services. This is because the IRS treats cryptocurrency as property and not currency.
 
15. Are cryptocurrencies subject to the wash sale rule?
Probably not. Section 1091 only applies to stock or securities. Cryptocurrencies are not classified as stocks or securities. Therefore, you could sell your ETH at a loss, repurchase it immediately, and still realize this loss on your tax return, whereas you cannot do the same with a stock. Please see this link for more information.
 
16. What if I hold cryptocurrency on an exchange based outside of the US?
There are two separate foreign account reporting requirements: FBAR and FATCA.
A FBAR must be filed if you held more than $10,000 on an exchange based outside of the US at any point during the tax year.
A Form 8938 (FATCA) must be filed if you held more than $75,000 on an exchange based outside of the US at any point during the tax year, or more than $50,000 on the last day of the tax year.
The penalties are severe for not filing these two forms if you are required to. Please see the second half of this post for more information on foreign account reporting.
 
17. What are the tax implications of gifting cryptocurrency?
Small gifts of cryptocurrency do not have a tax implication for the gift giver or for the recipient. The recipient would retain the gift giver's old cost basis, so it could be a good idea for the gift giver to provide records of the original cost basis to the recipient as well (or else the recipient would have to assume a cost basis of $0 if the recipient ever sells the cryptocurrency).
Large gifts of cryptocurrency could start having gift and estate tax implications on the giver if the value exceeds more than $14,000 (in 2017) or $15,000 (in 2018) per year per recipient.
Here's a good article on Investopedia on this issue.
An important exception applies if the gift giver gives cryptocurrency that has a cost basis that is higher than the market value at the time of the gift. Please see the middle of this post for more information on that.
 
18. Where can I learn even more about cryptocurrency taxation?
Unchained Podcast: The Tax Rules That Have Crypto Users Aghast
IRS Notice 2014-21
Great reddit post from tax attorney Tyson Cross from 2014
 
19. Are there any websites that you recommend in helping me with all of this?
Yes - I have used bitcoin.tax and highly recommend it. You can import directly from an exchange to the website using API, and/or export a .csv/excel file from the exchange and import it into the website. The exchanges I successfully imported from were Coinbase, GDAX, Bittrex, and Binance. The result is a .csv or other file that you can import into your tax software.
I have also heard good things about cointracking.info but have not personally used it myself.
 
20. Taxation is theft!
I can't help you there.
 
 
That is the summary I have for now. There have been a lot of excellent cryptocurrency tax guides on reddit, such as this one, this one, and this one, but I wanted to post my short summary guide on ethtrader which hopefully answers some of the questions you all may have about US taxation of ETH and other cryptocurrencies. Please let me know if you have any more questions, and I’d be happy to answer them to the best of my ability. Thank you!
Regarding edits: I have made many edits to my post since I originally posted it. Please refresh to see the latest edits to my guide. Thank you.
 
Disclaimer:
The information contained within this post is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional.
Any U.S. federal tax advice contained in this post is not intended to be used for the purpose of avoiding penalties under U.S. federal tax law.
Presentation of the information via the Internet is not intended to create, and receipt does not constitute, an advisor-client relationship. Internet users are advised not to act upon this information without seeking the service of a tax professional.
submitted by Nubboi to ethtrader [link] [comments]

Crypto and taxes... Anyone have a spouse who doesn't want to report?

So I'm going to try and keep this simple.
Husband I trade Crypto, not day trade and have not sold absolutely any Crypto back into USD. However, I'm insisting on reporting our Crypto to Crypto trades even if it's a small amount of gain. He is feverishly against this.
As far as I'm aware legally you're supposed to. He thinks it's stupid to be afraid of the IRS.
Who is correct here?
Edit: What about shape-shift...apparently there are no logs to get?
Edit2: apparently there are two types of Crypto traders... And I'm married to the other kind. Fun times.
submitted by tim3ofthen3rds to CryptoCurrency [link] [comments]

trading on margin vs futures, derivatives, etc

To followup on previous post:
https://www.reddit.com/Bitcoin/comments/g09cuk/good_exchange_to_short_btc_for_us_citizens/?utm_source=share&utm_medium=web2x
I looked at Phemex, Bybit, or Deribit but I don't know anything about trading derivatives. And I don't want to trade bitcoin.
My goal is buy more tezos with borrowed money. Kraken is too expensive. Binance forbids US residents and they do KYC even if they say they don't for small amount. Kucoin does not look reliable but at least 6 times cheaper in margin interest compared to Kraken. Kraken charges margin interest every 4 hours. Kucoin charges the same amount in 1 day. I don't want to use coinbase because they report to IRS and is a tax nightmare for me.
Questions:
  1. what exchanges out there let you trade altcoins with margin for someone living in US besides kraken, coinbase?
  2. what do you feel about trading futures, derivatives? I know nothing about them.
submitted by diamente1 to Bitcoin [link] [comments]

Playing with fire with FinCen and SEC, Binance may face a hefty penalty again after already losing 50 percent of its trading business

On 14 June, Binance announced that it “constantly reviews user accounts to improve (their) platform security and to comply with global compliance requirements”, mentioning that “Binance is unable to provide services to any U.S. person” in the latest “Binance Terms of Use” attached within the announcement.
According to the data from a third-party traffic statistics website, Alexa, users in the U.S. form the biggest user group of Binance, accounting for about 25% of the total visitor traffic.
In the forecast of Binance’s user scale compiled by The Block, the largest traffic is dominated by users in the U.S., surpassing the total of the ones from the second place to the fifth place.
Also, considering that the scale of digital asset trading for the users in the U.S. far exceeds that of the users of many other countries, it could mean that Binance may have already lost 50 % of the business income by losing users in the U.S. Apparently, such an announcement by Binance to stop providing services to users in the U.S. means Binance has no other alternative but “seek to live on.”
So, what are the specific requirements of the U.S. for digital asset exchanges and which of the regulatory red lines of the U.S. did Binance cross?
Compliance issues relating to operation permission of digital asset exchanges
In the U.S., the entry barrier for obtaining a business license to operate a digital asset exchange is not high. Apart from the special licencing requirements of individual states such as New York, most of the states generally grant licences to digital asset exchanges through the issuance of a “Money Transmitter License” (MTL).
Each state has different requirements for MTL applications. Some of the main common requirements are:
Filling out the application form, including business address, tax identification number, social security number and statement of net assets of the owneproprietor Paying the relevant fees for the licence application Meeting the minimum net assets requirements stipulated by the state Completing a background check Providing a form of guarantee, such as security bonds
It is worth noting that not all states are explicitly using MTL to handle the issues around operation permission of digital asset exchanges. For instance, New Hampshire passed a new law on 12 March 2017, announcing that trading parties of digital assets in that state would not be bound by MTL. Also, Montana has not yet set up MTL, keeping an open attitude towards the currency trading business.
On top of obtaining the MTL in each state, enterprises are also required to complete the registration of “Money Services Business” (MSB) on the federal level FinCEN (Financial Crimes Enforcement Network of the U.S. Treasury Department) issued the “Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies” on 18 March 2013. On the federal level, the guideline requires any enterprise involved in virtual currency services to complete the MSB registration and perform the corresponding compliance responsibilities. The main responsibility of a registered enterprise is to establish anti-money laundering procedures and reporting systems.
However, California is an exception. Enterprises in California would only need to complete the MSB registration on the federal level and they do not need to apply for the MTL in California.
Any enterprise operating in New York must obtain a virtual currency business license, Bitlicense, issued in New York
Early in July 2014, the New York State Department of Financial Services (NYSDFS) has specially designed and launched the BitLicense, stipulating that any institutions participating in a business relevant to virtual currency (virtual currency transfer, virtual currency trust, provision of virtual currency trading services, issuance or management of virtual currencies) must obtain a BitLicense.
To date, the NYSDFS has issued 19 Bitlicenses. Among them includes exchanges such as Coinbase (January 2017), BitFlyer (July 2017), Genesis Global Trading (May 2018) and Bitstamp (April 2019).
Solely from the perspective of operation permission, Binance has yet to complete the MSB registration of FinCEN (its partner, BAM Trading, has completed the MSB registration). This means that Binance is not eligible to operate a digital asset exchange in the U.S. FinCEN has the rights to prosecute Binance based on its failure to fulfil the relevant ‘anti-money laundering’ regulatory requirements.
Compliance issues relating to online assets
With the further development of the digital asset market, ICO has released loads of “digital assets” that have characteristics of a “security” into the trading markets. The Securities and Exchange Commission (SEC) has proposed more comprehensive compliance requirements for digital asset exchanges. The core of the requirements is reflected in the restrictions of offering digital assets trading service.
In the last two years, the SEC has reiterated on many occasions that digital assets that have characteristics of a security should not be traded on a digital asset exchange
In August 2017, when the development of ICO was at its peak, the SEC issued an investor bulletin “Investor Bulletin: Initial Coin Offerings” on its website and published an investigation report of the DAO. It determined that the DAO tokens were considered ‘marketable securities’, stressing that all digital assets considered ‘marketable securities’ would be incorporated into the SEC regulatory system, bound by the U.S. federal securities law. Soon after, the SEC also declared and stressed that “(if) a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
On 16 November 2018, the SEC issued a “Statement on Digital Asset Securities Issuance and Trading,” in which the SEC used five real case studies to conduct exemplary penalty rulings on the initial offers and sales of digital asset securities, including those issued in ICOs, relevant cryptocurrency exchanges, investment management tools, ICO platforms and so on. The statement further reiterates that exchanges cannot provide trading services for digital assets that have characteristics of a security.
On 3 April 2019, the SEC issued the “Framework for ‘Investment Contract’ Analysis of Digital Assets” to further elucidate the evaluation criteria for determining whether a digital asset is a security and providing guiding opinions on the compliance of the issuance, sales, holding procedures of digital assets.
As of now, only a small number of digital assets, such as BTC, ETH, etc. meet the SEC’s requirement of “non-securities assets.” The potentially “compliant” digital assets are less than 20.
Early in March 2014, the Inland Revenue Service (IRS) has stated that Bitcoin will be treated as a legal property and will be subject to taxes. In September 2015, the U.S. Commodity Futures Trading Commission (CFTC) stated that Bitcoin is a commodity and will be treated as a “property” by the IRS for tax purposes.
On 15 June 2018, William Hinman, Director of the Corporate Finance Division of the SEC, said at the Cryptocurrency Summit held in San Francisco that BTC and ETH are not securities. Nevertheless, many ICO tokens fall under the securities category.
So far, only BTC and ETH have received approval and recognition of the U.S. regulatory authority as a “non-securities asset.”
Since July 2018, the SEC has investigated more than ten types of digital assets, one after another, and ruled that they were securities and had to be incorporated into the SEC regulatory system. It prosecuted and punished those who had contravened the issuance and trading requirements of the securities laws.
Although there are still many digital assets that have yet to be characterised as “securities”, it is extremely difficult to be characterised as a “non-securities asset” based on the evaluation criteria announced by the SEC. As the SEC’s spokesperson has reiterated many times, they believe the majority of ICO tokens are securities.
Under the stipulated requirements of the SEC, Coinbase, a leading U.S. exchange, has withdrawn a batch of digital assets. The assets withdrawn included digital assets that had been characterised as “securities” as well as those that have high risks of being characterised as “securities.” However, it is worth noting that although the risk to be characterised as “securities” for more than ten types of digital assets, which have not been explicitly required by SEC to be withdrawn, is relatively small, they are not entirely safe. With the further escalation of the SEC’s investigations, they could still be characterised as securities and be held accountable for violating their responsibilities. However, this requires further guidance from the SEC.
*Coinbase’s 14 types of digital assets that have yet to be requested for withdrawal
Poloniex announced on 16 May that it would stop providing services for nine digital assets, including Ardor (ARDR), Bytecoin (BCN), etc. under the compliance guidelines of the SEC. On 7 June, Bittrex also announced that it would stop providing trading services to U.S. users for 32 digital assets. The action of the SEC on its regulatory guidance was further reinforced apparently.
In fact, it is not the first time that these two exchanges have withdrawn digital assets under regulatory requirements. Since the rapid development of digital assets driven by ICO in 2017, Poloniex and Bittrex were once leading exchanges for ICO tokens, providing comprehensive trading services for digital assets. However, after the SEC reiterated its compliance requirements, Poloniex and Bittrex have withdrawn a considerable amount of assets in the past year to meet the compliance requirements.
In conclusion, the takeaways that we have got are as follows: Under the existing U.S. regulatory requirements of digital assets, after obtaining the basic entry licences (MSB, MTL), exchanges could either choose the “compliant asset” solution of Coinbase and only list a small number of digital assets that do not have apparent characteristics of a security, and at all times prepare to withdraw any asset later characterised as “securities” by the SECs; or choose to be like OKEx and Huobi and make it clear they would “not provide services to any U.S. users” at the start.
Binance has been providing a large number of digital assets that have characteristics of a security to U.S users without a U.S. securities exchange licence, so it has already contravened the SEC regulatory requirements.
On top of that, it is also worth noting that the rapid development of Binance has been achieved precisely through the behaviours of “contrary to regulations” and “committing crimes.” Amid the blocking of several pioneering exchanges, such as OKCoin, Huobi, etc. providing services to Chinese users in the Chinese market under new laws from the regulatory authorities, Binance leapfrogged the competition and began to dominate the Chinese market. Similarly, Binance’s rapid growth in the U.S. market is mainly due to its domination of the traffic of digital assets withdrawn by Poloniex and Bittrex. One can say that Binance not only has weak awareness of compliance issues, but it is also indeed “playing with fire” with the U.S. regulators.
In April 2018, the New York State Office of Attorney General (OAG) requested 13 digital asset exchanges, including Binance, to prepare for investigations, indicating it would initiate an investigation in relations to company ownership, leadership, operating conditions, service terms, trading volume, relationships with financial institutions, etc. Many exchanges, including Gemini, Bittrex, Poloniex, BitFlyer, Bitfinex, and so on, proactively acknowledged and replied in the first instance upon receipt of the investigation notice. However, Binance had hardly any action.
Binance has been illegally operating in the U.S. for almost two years. It has not yet fulfilled the FinCEN and MSB registration requirements. Moreover, it has also neglected the SEC announcements and OAG investigation summons on several occasions. The ultimate announcement of exiting the U.S. market may be due to the tremendous pressure imposed by the U.S. regulators.
In fact, the SEC executives have recently stressed that “exchanges of IEO in the U.S. market are facing legal risks and the SEC would soon crack down on these illegal activities” on numerous occasions. These were clear indications of imposing pressure on Binance.
Regarding the SEC’s rulings on illegal digital asset exchanges, EtherDelta and investment management platform, Crypto Asset Management, it may not be easy for Binance to “fully exit” from the U.S. market. It may be faced with a hefty penalty. Once there are any compensation claims by the U.S. users for losses incurred in the trading of assets at Binance, it would be dragged into a difficult compensation dilemma. It would undoubtedly be a double blow for Binance that has just been held accountable for the losses incurred in a theft of 7,000 BTC.
Coincidentally, Binance was tossed out of Japan because of compliance issues. In March 2018, the Financial Services Agency of Japan officially issued a stern warning to Binance, which was boldly providing services to Japanese users without registering for a digital asset exchange licence in Japan. Binance was forced to relocate to Malta instead. Binance may have to bear hefty penalties arising from challenging the compliance requirements after it had lost important markets due to consecutive compliance issues.
The rise of Binance was attributed to its bold and valiant style, grasping the opportunity created in the vacuum period of government regulation, breaking compliance requirements and rapidly dominating the market to obtain user traffic. For a while, it gained considerable advantages in the early, barbaric growth stage of the industry. Nonetheless, under the increasingly comprehensive regulatory compliance system for global digital asset markets, Binance, which has constantly been “evading regulation” and “resisting supervision” would undoubtedly face enormous survival challenges, notwithstanding that it would lose far more than 50 per cent of the market share.
https://www.asiacryptotoday.com/playing-with-fire-with-fincen-and-sec-binance-may-face-a-hefty-penalty-again-after-already-losing-50-percent-of-its-trading-business/
submitted by Fun_Judgment to CryptoCurrencyTrading [link] [comments]

Google's search for Bitcoin Coronavirus overtake Bitcoin halving 2020

Halving bitcoin is a short-term trend due to hyped feelings. Google trend data and price reactions suggest that halving could be an overly hyped incident. In addition, the interest in "Bitcoin Coronavirus" has halved given the safe perspective.
The five-year graph of Google trends and price trends indicate that the mood and online search peakedduring the halving (July 9, 2016) and fell almost instantly over the next few weeks. In addition, the price had taken a downward turn weeks before halving.
Coincidentally, the small increase in the trend before the moon shot rise coincides with the price peak. Therefore, after a certain point, there was an inverse correlation between online sentiments and price
The "Google trend" for the keyword "Bitcoin halving" appears to be falling again, indicating that the bull run may be priced in in half.
If we look at the top five capitalized altcoins - Ethereum, Ripple (XRP), Bitcoin Cash (BCH), Litecoin (LTC), and Bitcoin SV (BSV) - we see that the volume of search traffic largely matches the order of each crypto correlates assets by market cap - with the exception of “Litecoin”, which has more searches than “Bitcoin Cash”.
One of the biggest barriers to entry for disruptive technology is the incompetence of the average consumer. On the other hand, simply chasing consumer illiteracy can be a blessing for some really terrible inventions. In the clash of these two ideologies, we have reached the dumb currency singularity.
The digital currency has been on the way to dumb singularity for more than a decade, and we finally crossed the event horizon at the end of last year. At the end of 2019, the IRS tacitly published a series of guidelines for virtual currencies, in which common cryptocurrencies such as Bitcoin and Ethereum were combined with Fortnite V-Bucks and Roblox Money.
I have just been informed that the legal term for the Roblox currency is "Robux". That seems ... fair.
My point, however cumbersome, is that someone who has had some influence with the United States Internal Revenue Service saw his grandchild begging for a Roblox card at the Walgreens cash register and thought, "MY GOD, THE BITCOINS COME FOR THE CHILDREN. " And then, when he expressed his horror, a phalanx of IRS colleagues looked around enough and thought "Yes, that sounds right" that it was lit green for public consumption.
This recommendation (on which the IRS claimed that Fortnite and Roblox players should report all purchases of "Bucks", be it "V" or "Ro" -) was monolithic for almost three months before being as quiet as off the stage was escorted it had arrived. In a bout of Streisand, this change attracted more attention than the addition initially, and the IRS made a formal statement. "The IRS recognizes that the language on our side may be of concern to some taxpayers," they said. "We changed the language to avoid confusion. Transactions in virtual currencies as part of a game that does not leave the game environment (virtual currencies that are not convertible) do not require a taxpayer to state this in their tax returns." "
submitted by jakkkmotivator to thecryptobasic [link] [comments]

BitcoinTaxes Podcast: Crypto Audits w/ Alex Kugelman

BitcoinTaxes Podcast Link
TLDR; Alex Kugelman, a tax controversy lawer, discusses crypto audits and how to avoid them.
Highlights:
IRS audits are a real possibility for anyone who has traded cryptocurrencies. Our guest today is Alex Kugelman, a tax controversy lawyer with an abundance of knowledge concerning cryptocurrency audits. He's here to share his expertise on IRS cryptocurrency audits, including risk reduction strategies as well as enforcement predictions and misconceptions.
Alex Kugelman specializes in IRS audits. His experience includes four years of Federal government court experience at the U.S. Tax Court and a U.S. District Court. [00:40]
Alex: I'm an attorney out in California. I clerked for a US District Court judge and as well as the United States Tax Court. I've been in private practice exclusively doing tax controversy work for the past five years or so. I kind of got involved with crypto towards the end of 2016. I tended to represent clients mainly with compliance & disclosure issues with respect to cryptocurrency. I just really like it. Really interesting area.
The Coinbase summons in 2018 played a major role in Alex's interest in crypto audits. [01:19]
Alex: What started me into the crypto space was when the IRS first issued summons for Coinbase. We started getting some interesting calls regarding that. And at that time I thought to myself, this might be an interesting area. So I started following the actual summons enforcement proceeding at the District Court here in San Francisco - from there kind of worked with people under different types of compliance, including international disclosures. Now we're starting to see some of the first cryptocurrency audits come through.
First, let's get a brief rundown of how IRS audits work. [02:00]
Alex: It is important to understand the IRS as an administrative agency and all different layers of it. So when it comes to an audit the term that the IRS uses is an examination and there's three basic levels.
The first is a correspondence exam. That's where you get a letter that says, dear taxpayer, so-and-so reported that you had $100 of interest income that wasn't on your tax return - we're going to increase your tax. If you want to challenge that, you can. And that's basically termed an under reporter notice. That's probably not going to be a cryptocurrency audit if you get that notice.
The next one is an office exam. That is someone in the local IRS office sending you a letter that says, we have selected a certain tax return for audit and we're going to look at these issues. We'd like you to call us to schedule an appointment. That's going to be usually a tax compliance officer that is doing that.
The third and probably the most serious level of exam is a field examination. That's also going to be a local IRS representative, typically a revenue agent. There, the revenue agent may come to your work or ask come to your work or business to kind of conduct the audit.
All three of those are going to start the same: a letter that's sent to you at your most recent address provided to the IRS.
Cryptocurrency audits follow a similar protocol. [05:40]
Alex: I think it's likely that most crypto audits are going to start with one of two things happening. One is that there is information from the Coinbase summons that is inconsistent with what was on a taxpayer's tax return. I think for someone who's involved with that issue, they're going to have a good sense of that one because they should've gotten an email notice from Coinbase.
Or two, the audit notice is going to identify older tax years - 2013, 2014 or 2015 because those are the years that the information related to.
Another reason I think people will get audited is going to be because information on the return is incomplete, in the sense that the taxpayer or the cryptocurrency owner reports some transactions, without enough detail to figure out the actual cost basis.
Does reporting your data in an aggregated fashion increase your chances of being audited? [06:45]
Alex: I mean one - to the extent that there's going to be a lot of taxpayers - a lot of people use TurboTax, right? If that's the way TurboTax is preparing all of those returns, it would seem to me you're kind of in a herd of people like that. And at least it's consistent with what a lot of people are doing. The second part of that is going to be at least those people who have prepare the returns in that manner, they're going to, or should have, the underlying data. So even if it's an aggregate reporting of each asset class as opposed to each individual trade, if there ever were questions then you're going to have your CSV files, you're going to have your Bitcoin.tax exports, you're going to have all the information that you need to back that up.
Alex is an advocate of over-reporting your information to the IRS. [09:30]
Alex: I'm a big proponent of over-reporting - and I don't mean paying too much tax. I just mean including too much information. Because at some point there's kind of two ways that your returned can be flagged: a computer flags the return for some reason or there's a special unit or a person who actually flags it. At the end of the day, a human being will be looking at that return and deciding whether it actually is going to go all the way through to an audit. I want them to completely understand what's being reported, why it's been reported, and if there's too much information, that's fine - it's less likely that someone's going to have more questions.
A crypto audit is very likely to be a field exam - and it's important to hire a good rep. [11:00]
Alex: It's very likely going to be a field exam, which means you're going to have a revenue agent - and those are kind of the best of the best auditors for an IRS audit. And remember - an IRS audit is a civil matter. It is not criminal at this point. Again, it's unlikely that it will become criminal. It is, however, the highest level of audit you're going to get.
If you're going to hire a representative, which you have every right to do, you should contact that person, let them know what's going on and probably have them interface with the auditor. You should receive, as part of the opening notice or letter, the information document request - which is identifying what things to bring for the auditor. Also, it'll tip to what topics might be important. For example the typical things you're going to see will be bank statements, financial or asset account statements, which I view as requesting exchange statements or exchange CSV files. Any documents that show the cost basis for your cryptocurrency trades.
Audits are more art than science. [13:35]
Alex: The auditor has a fair amount of power. So if you play real hardball - that's not going to prevent the auditor from expanding to other years. So when you get that audit notice ,and let's say that you're going to deal with this yourself, the first thing you want to kind of figure out is what are the areas that I wouldn't want to go into, and what are the areas that I don't have good records? That will help guide the way to respond or what information to pull together.
The reality is, and let's just be honest here - for most people reporting cryptocurrency gains, they have all of the information. The IRS does not have much. They might have some records from Coinbase, but it's not as if they have a treasure trove of third party data.
The burden is really going to be, in every audit, on the taxpayer to prove their tax return is correct.
It's difficult to say how lenient the IRS will be regarding past years. [15:35]
Alex: I think the way that I would look at it is that maybe the standard of of records required to really substantiate older years might be a little bit lower for older years as opposed to now because it's different now. There's a lot better information provided by some of the exchanges. There's a lot more software out there to help you, especially for people who are newer to crypto. You should have access to all your bank records. You should still have a lot of emails, reflecting on-ramping off-ramping, or other purchases. You should be able to kind of pull this all together.
I can understand when we have clients who come in and are early adopters and they're missing chunks of information. So I do think that in those types of circumstances, yes, I think there would be a little bit of leniency. But I don't think if you're asking, hey, I reported my gains in 2017 but I never really did it 14, 15 or 16 - I don't think that's going to be viewed very favorably.
It is possible to substantiate your data without all of your records. [19:00]
Alex: I think the first thing is, I mean, outside of cryptocurrency and just generally in audits, how many people have complete records to support everything on their tax return from three years ago? Right? It's just not the reality.
The best source of information in a lot of these cryptocurrency clients are the clients themselves. They kind of know what they did and they can remember. There's some who take good notes and other people don't, but as you go through and ask people: what exchanges have you've been on, what type of coins, if you bought any ICOs, have you ever sold for actual US cash, and have you ever bought goods or services? As you talk through things people tend to recall what happened. We use that information and we cross check that against bank statements, as well as CSV files, to pick out what those transactions look like.
Most people have some sort of records, at least reflecting the transfer in and the transfer back out of that exchange. So you can use historical data and historical pricing information to essentially estimate what that transaction would have been. And then what we do is we provide a written statement summary of what we're doing and why we're doing it.
The other big one that we see all the time - and anybody listening to this, please hear this, do not trade for your friends on your exchange accounts - because that type of commingling causes such major problems. Essentially you are walking into those taxable gains just because you're allowing someone access to the exchange to make sales.
If you need representation for an audit, get representation. [23:00]
Alex: My general rule is that I think experienced representatives are really important. I probably would not hire the CPA that prepared my return unless they were: one, experienced with being a representative in audits. And two, you felt comfortable that they weren't going to go in there with a conflict of interest. But I do think if you're worried about going into audit - hiring a skilled, and experienced rep is really, really important.
If they're experienced with this, they should understand the appropriate ethical standards and go in there and essentially help resolve portions of the audit and move it to a resolution that you can deal with.
Taxpayers actually have a lot of leverage in an audit. And that sounds crazy to say, but there is a lot of truth to that. And so as you're kind of working through the audit itself, you want to make sure that you're not just agreeing to something to be done with it. You're not agreeing to something just because you think that you'll get in more trouble or get a worse result otherwise.
There are important risk-reduction strategies you can utilize to avoid a crypto audit. [28:15]
Alex: The first thing that you really want to do, is just assess; for those of you that are really worried about an audit - just assess what it is you've actually done over the years. When did you start trading, what exchanges were you on, do you have records that reflect on-ramping and off-ramping? And that's going to be your bank account statements. Do you know where you've been, what exchanges you've been on?
For foreign exchanges, there may not be as much of that AML & KYC compliance, but I really believe that you do have reporting requirements under FATCA for FBAR and something called an 8938, which if you listen to the podcast with Tyson, he kind of explains what that is. But it's basically if you have ownership of a foreign bank account or asset, you have certain reporting requirements, whether you've had income or not.
You want to make sure you at least track when you've actually exchanged crypto for cash or vice versa. That's partly because that's one of those areas where when people can get in trouble with some sort of federal investigators - because those types of transactions can be potentially considered money laundering.
For those who believe that they've used like-kind exchange rules to defer taxable gains -you should look on your tax returns to see if you filed the form 8824, which is where like kind exchanges are actually reported. That kind of goes back to the over reporting issue I was talking about before. I think that if you didn't report the actual trades that you're taking like-kind treatment for in past years, I don't know that you've actually taken like-kind treatment to be frank with you. I think, objectively, that might be viewed as just not reporting certain transactions.
You want to make sure that you address these issues sooner rather than later.
1099-K forms can be misleading - to the recipient and, potentially, the auditor. [32:40]
Alex: A 1099-K is actually a merchant processing third party information returns. And it really is typically associated with people who have credit card sales - so it's going to reflect a gross amount and typically on a monthly basis.
It shows the gross amount and what I've seen too is that sometimes transfers actually get caught into that amount as well. So it's not even just gross sales or purchases - it may have other information. So the 1099-K can be really inflated. That's why reconciling that against accounting records is really, really important because that is one of those issues that I think could lead to an exam.
To those who think crypto isn't beholden to tax laws: you are not correct. [37:38]
Alex: The current commissioner of the IRS is Charles Rettig, and he's a really well known practitioner in tax controversy. I know from people that know him well, that he's actually mentioned Reddit as one of the reasons that cryptocurrency enforcement is his number one enforcement priority right now.
The other person that I've seen speak a couple of times is the head of the IRS Criminal Investigation Unit. His name is Don Fort and every year he does a presentation at the National Tax Controversy and Criminal Tax Conference. The last two years cryptocurrency has been number two and number one on his list. As much as the IRS lacks the funding and the manpower that it needs for all the enforcement, the IRS CI are really, really good and they are probably best agency at dealing with cryptocurrency enforcement issues.
I really think that it's gaining steam and I think once the audits from the Coinbase summons kind of get going, I think it's going to be a really scrutinized area. I think the people who have gone through the cost and the pain of disclosing and amending returns and doing everything they can will be happy that they did in a couple of years. I think the other people are going to be sweating it out - I don't know if it's ever really worth it to be honest with you. I would recommend people do their best to get in compliance.
In summary: do your best to report your crypto gains and losses - and don't try to pull one over on the IRS. [42:36]
Alex: For people who have potential issues with past years, one is getting a consistent record and just amending your past years, so they're consistent.
For people who have the foreign account issues - let's just say, for example, had an account with Binance, and that Binance account was never reported. The IRS has disclosure programs that allow you to amend certain returns, pay the tax that you report and pay a penalty, which would be 5% of the the highest account value that you have.
For people who don't want to deal with this, I think taking evasive steps is the best way to get the worst result possible. One of the things that I learned very early in dealing with audits and tax compliance, is that you can always make things worse. I think you really just want to address it and resolve the issue while you have a good opportunity.
We may see criminal prosecution of some of the "big fish" tax evaders from the Coinbase summons. [46:43]
Alex: Yeah, and I think the two things that I'm fairly certain we're going to see: one is we're going to see the IRS use the information provided by Coinbase to start auditing the biggest account holders from that period. I think that's very likely.
Probably the second one that I would say is very likely is that you're going to see limited criminal prosecutions related to cryptocurrency. And these are going to be people that have some sort of level of notoriety, whether actually famous or maybe famous in the cryptocurrency world. That's typically how the IRS and Department of Justice uses limited resources to prosecute criminal tax tax crimes.
Alex is a great guy to reach out to with any audit-related questions, crypto or otherwise. [48:50]
Alex: You can go to my website: www.kugelmanlaw.com. You can email me at [email protected]. I have clients all over the country, international clients. If you need any sort of help, whether that's representing you, or at least doing the nitty gritty audit investigation, we're always willing to talk to people and help them out as best we can.

If you enjoyed our podcast, be sure to check back frequently for more great discussions about a range of topics in the crypto space. If you have any questions for Alex Kugelman, or want to schedule a consultation with him, he can be reached via his website www.kugelmanlaw.com, or via email at [email protected].
If you would like to request a topic for an interview, or have any questions related to this podcast, be sure to reach out to us at [email protected].
submitted by Sal-BitcoinTax to bitcointaxes [link] [comments]

Hi /r/ethtrader! I quit my job to start Cointaxes to answer questions about taxes and digital currencies so you can have confidence even if you're not a HODLer! Sharing our first comprehensive article on the Coinbase & Gemini 1099-K. Would love your input on ANY other topics or questions! :)

Hi /ethtrader! Thank you for reading this.
I felt the world of digital currencies is a bit too uncertain, so I want to do what I can to create more confidence and certainty! Please let me know if you have any questions or comments (I'll probably respond to every comment here!)
Check out our first comprehensive article on the Coinbase / Gemini 1099-K
Some "fun" facts you may not know about digital currency taxes
Here's two quick "fun" facts you may not know. We will be posting in-depth articles on these, too. Consider subscribing to our newsletter to hear first when they've been published!
About Cointaxes
Cointaxes was formed and funded with the mission to establish confidence and certainty around cryptocurrency.
We see global adoption of digital currencies as an inevitability. The uncertainty lies in how effectively and smoothly this once-in-a-lifetime shift occurs. As a tax preparation service, we have a special seat in the cryptocurrency ecosystem directly related to this uncertainty: it is our job to help both citizens and governments around the world understand how to use and treat digital currencies.
If our mission excites you
Disclaimers
Important Disclaimers: This is NOT tax advice and should NOT be relied upon for making any tax decisions. We always recommend speaking to a tax professional before making decisions related to your taxes and our guides are not a substitute for tax advice. While I have assembled and provided this information to the best of its knowledge, I make no representations or warranties as to the accuracy or timeliness of the information contained herein. You can read the full disclaimers here.
submitted by StopTheVok to ethtrader [link] [comments]

Hi /r/Bitcoin! I quit my job to start Cointaxes to answer questions about taxes and digital currencies so you can have confidence even if you're not a HODLer! Sharing our first comprehensive article on the Coinbase & Gemini 1099-K. Would love your input on ANY other topics or questions! :)

Hi /Bitcoin! Thank you for reading this.
I felt the world of digital currencies is a bit too uncertain, so I want to do what I can to create more confidence and certainty! Please let me know if you have any questions or comments (I'll probably respond to every comment here!)
Check out our first comprehensive article on the Coinbase / Gemini 1099-K
Some "fun" facts you may not know about digital currency taxes
Here's two quick "fun" facts you may not know. We will be posting in-depth articles on these, too. Consider subscribing to our newsletter to hear first when they've been published!
About Cointaxes
Cointaxes was formed and funded with the mission to establish confidence and certainty around cryptocurrency.
We see global adoption of digital currencies as an inevitability. The uncertainty lies in how effectively and smoothly this once-in-a-lifetime shift occurs. As a tax preparation service, we have a special seat in the cryptocurrency ecosystem directly related to this uncertainty: it is our job to help both citizens and governments around the world understand how to use and treat digital currencies.
If our mission excites you
Disclaimers
Important Disclaimers: This is NOT tax advice and should NOT be relied upon for making any tax decisions. We always recommend speaking to a tax professional before making decisions related to your taxes and our guides are not a substitute for tax advice. While I have assembled and provided this information to the best of its knowledge, I make no representations or warranties as to the accuracy or timeliness of the information contained herein. You can read the full disclaimers here.
submitted by StopTheVok to Bitcoin [link] [comments]

Update: Hi /r/Bitcoin! I quit my job to start Cointaxes. Here to answer questions about taxes and digital currencies! I published a YouTube series on top questions, launched crypto tax tools and would love your input on ANY other topics or questions! :)

Hi /Bitcoin! Thank you for reading!
In the last two months since I posted here, my team and I have been hard at work trying to make everyone's lives a bit easier for cryptocurrency and tax. In fact, we will be able to launch some tools this summer that will help optimize your trades from a tax perspective - as you make them. We think there's a chance we could even make it tax advantageous to use crypto vs. fiat... more on that later. For now, we would love to get your feedback on what we're working on.
The TLDR: We made Cointaxes so you can estimate your tax liability and whether or not you have FINCEN obligations for free on our site. It was important to make this summary information free because our mission is create confidence and certainty around cryptocurrencies.
Please let me know if you have any questions or comments (I'll probably respond to every comment here!)
Watch a Cointaxes' YouTube Series answering the top questions How are cryptocurrencies taxed? Why should you pay this year? Am I taxed when I convert into fiat or pull money out of my exchanges? What about mining and airdrops? All this and more is covered!
We launched a tool to help measure your FINCEN requirements for FBAR & FATCA
In my last post, I mentioned a "fun" fact around FINCEN requirements. The media is talking about this more (i.e. CNBC - "How cryptocurrency investors could find themselves behind bars"). The good news is it's really simple for the ledger technology we built to check if you cross the $10,000 or $50,000 thresholds. On our site, Cointaxes, you can add your exchanges and then check if you have crossed the threshold. Importantly, we wanted to make this critical information available for free. Particularly because the the deadline is April 15.
If you fail to file the FBAR, the deadline will be extended to October 15. You can read more about this on official government sites General FBAR information, FBAR FAQS (not super helpful IMO) and the online form itself.
About Cointaxes
Cointaxes was formed and funded with the mission to establish confidence and certainty around cryptocurrency. We have a base tax preparation tool with support for Coinbase, GDAX, Binance, Bittrex, Poloniex, and Kraken.
We made Cointaxes so you can estimate your tax liability and whether or not you have FINCEN obligations for free on our site. Your detailed reports or Form 8949 for tax filing is behind a modest paywall compared to what we've seen other tools out there charging.
We see global adoption of digital currencies as an inevitability. The uncertainty lies in how effectively and smoothly this once-in-a-lifetime shift occurs. As a tax preparation service, we have a special seat in the cryptocurrency ecosystem directly related to this uncertainty: it is our job to help both citizens and governments around the world understand how to use and treat digital currencies.
If our mission excites you
Newsletter update
If you want to stay on top of regulatory and tax related crypto news (as well as when we roll out shiny new tools) then consider subscribing to our newsletter.
If you signed up for our newsletter two months ago - sorry for the lack of content! We've been too focused on trying to get this product up and running in time for the deadline (barely made it!) We recently expanded our team and will be able to be much more consistent about the content we're creating!
Important Disclaimers: For this post and any of my replies to your questions below... this is not tax advice and should not be relied upon for making any tax decisions. We always recommend speaking to a tax professional before making decisions related to your taxes and our guides are not a substitute for tax advice.
submitted by StopTheVok to Bitcoin [link] [comments]

Hi /r/CryptoCurrency! I quit my job to start Cointaxes to answer questions about taxes and digital currencies so you can have confidence even if you're not a HODLer! Sharing our first comprehensive article on the Coinbase & Gemini 1099-K. Would love your input on ANY other topics or questions! :)

Hi /CryptoCurrency! Thank you for reading this.
I felt the world of digital currencies is a bit too uncertain, so I want to do what I can to create more confidence and certainty! Please let me know if you have any questions or comments (I'll probably respond to every comment here!)
Check out our first comprehensive article on the Coinbase / Gemini 1099-K
Some "fun" facts you may not know about digital currency taxes
Here's two quick "fun" facts you may not know. We will be posting in-depth articles on these, too. Consider subscribing to our newsletter to hear first when they've been published!
About Cointaxes
Cointaxes was formed and funded with the mission to establish confidence and certainty around cryptocurrency.
We see global adoption of digital currencies as an inevitability. The uncertainty lies in how effectively and smoothly this once-in-a-lifetime shift occurs. As a tax preparation service, we have a special seat in the cryptocurrency ecosystem directly related to this uncertainty: it is our job to help both citizens and governments around the world understand how to use and treat digital currencies.
If our mission excites you
Disclaimers
Important Disclaimers: This is NOT tax advice and should NOT be relied upon for making any tax decisions. We always recommend speaking to a tax professional before making decisions related to your taxes and our guides are not a substitute for tax advice. While I have assembled and provided this information to the best of its knowledge, I make no representations or warranties as to the accuracy or timeliness of the information contained herein. You can read the full disclaimers here.
submitted by StopTheVok to CryptoCurrency [link] [comments]

Which crypto exchanges provide user information to tax authorities (CRS / FATCA)?

Which crypto exchanges provide user information to tax authorities (CRS / FATCA)?

Can tax authorities find about my Bitcoin or other cryptos profits or holdings?
This is a very common question we receive at CryptoTax, which seems to bother many people in the crypto community.
With the rise of the KYC crypto exchanges get more and more personal transaction data. This is not just the data about the transactions on a specific exchange, but something that could be used as an entry point to trace the transactions across the blockchains and get an overall picture of someone’s profits and holdings. For example the German tax authority has officially announced to fight tax evasion schemes by using blockchain.
This makes the crypto exchanges a great target for data mining, especially from the tax authorities.
How safe is user’s personal and financial data at crypto exchanges? Are they obliged to share this data with tax authorities? Will they do that, if they are asked to?
We have tried to find answers to these questions by taking into consideration the automated reporting requirements under FATCA and CRS (see below), but it turned out to be very difficult. There seems to be a difference depending on the user’s tax residence (US vs Non-US), the location of the exchange and even other factors like the banking partner of the exchange. It seems to be unclear how the legal requirements for automated reporting are or will be implemented by various crypto exchanges around the world.
That is why we decided to go for crowd intelligence and start the discussion here.
This is what we have so far:
  1. Financial institutions worldwide are legally required to automatically share their customer's information by the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards (CRS). FATCA is relevant for the US taxpayers with foreign accounts, while CRS is relevant for the tax residents of over 100 CRS participating jurisdictions, which include the whole EU, but also China, Hong Kong, Switzerland, Singapore and Panama.
The automatically reported information includes personal data such as name and address of the account holder, but also financial data such as gross amount made from the sale of an asset held in the account and the account balance on the reporting date.
A good introduction and practical information on CRS and FATCA can be found here.
  1. Whereas it is quite clear, when individuals need to report FATCA, it is not clear, which crypto exchanges globally are automatically providing FATCA or CRS reports to tax authorities.
Will exchanges in different jurisdictions consider themselves as financial institutions falling under the FATCA or CRS reporting requirements? Are crypto assets to be considered as financial asset to be reported under the CRS definitions?
At least for Bitfinex we know that they are reporting both FATCA and CRS, as per Bitfinex email to their customers sent already in May 2018.
Bitstamp explicitly mentions FATCA reporting in their Terms of Use. CRS is not mentioned, but it does not mean they don't report it, if required.
Binance's Terms of Use do not mention FATCA or CRS reporting. However Binance has recently moved to Malta, which is one of the CRS participating jurisdictions.
Kraken’s Terms of Service also do not explicitly mention FATCA or CRS. According to a Kraken related account on Reddit, Kraken does not “alert the IRS about your crypto”, which probably means that at least at that time they did not automatically report to the IRS.
These examples show how different the situation might be for different exchanges.
Ultimately it seems clear that at least one exchange (Bitfinex) is automatically reporting both FATCA and CRS, whereas we can only hope that other exchanges do not do that, but ultimately, we do not know that. This also might change very quickly, and the regulators could require from exchanges to provide the corresponding information. We see US exchanges like Coinbase and Gemini reporting Form 1099-K to the IRS (which is however different to FATCA/CRS discussed here). We also see Kraken responding to requests from various law enforcement agencies around the world.
What do you think, which exchanges might be reporting FATCA / CRS? Maybe you have personal experience with one of the exchanges and received FATCA / CRS forms from an exchange?
Would be great to have your thoughts and comments!
submitted by CryptoTaxNow to CryptoCurrency [link] [comments]

FBAR & FATCA Filing Information for Crypto Traders (Podcast & Summary)

Hey all - we've noticed a ton of our customers asking about FBAR & FATCA filing requirements. So, I interviewed a tax professional well-versed in FBAR & FATCA reporting requirements for crypto traders. Below is a link to the actual podcast, and then a summary of the interview, with timestamps in case you want to just fast forward to a certain part. Full disclosure, I work for Bitcointaxes.
BitcoinTaxes Podcast Link
Guest: Andrew Gordon, ESQ.
Topic: FBAR & FATCA Filing for Crypto
Summary:
Our guest, Andrew Gordon, is a tax attorney who understands the ins and outs of foreign account reporting in relation to cryptocurrency trading. Andrew joins us to discuss FBAR & FATCA reporting, the penalties associated with not reporting, and to address whether he believes crypto traders should be filing these forms.
Andrew has been working in the crypto-space since 2014. [00:24]
Andrew: Actually several years ago, ago in 2014, we had a client approach us who was getting paid "magic internet money", from the Ethereum Foundation. Back then the IRS had not released any guidance - it wasn't till later in 2014 that the IRS even defined Crypto as property. That was our first introduction and we were and presented the question of, well, if I'm getting paid these random tokens called Ethereum, how do we account for this?
In terms of foreign account reporting, there's two main forms you need to know about: FBAR & FATCA. The FBAR is a separate form that is due the same day as your returns. [02:42]
Andrew: FBAR is my favorite four letter word. It stands for "Foreign Bank Account Report". It isn't actually filed with your tax return. It's a separate form. It's filed online, electronically. It has the same due dates as your tax returns - April 15th and it can be extended six months to October 15th. So same due dates, but it's filed differently, still sent to the Department of Treasury - it's a separate form.
On the FBAR form, what taxpayers have to do is they have to identify the maximum value at any time during the tax year of their foreign bank accounts. If that value at anytime exceeded $10,000, you have to report. The FBAR is an informational form, which means that there's no tax actually owed.
There are popular exchanges that ARE considered foreign entities and some that are NOT considered foreign entities.[04:15]
Andrew: Unfortunately, it's not that easy because a lot of exchanges don't even make their address public - it's pretty hard to find. Even just as a starting point, I would list out all of the exchanges that you've used and try to use Google to find their addresses.
There's a couple that we know are considered foreign financial institutions at this point, and the most popular is Binance. In addition, many people suspect that Bitfinex has kind of self-reported themselves as a foreign financial institution and their information is being shared with taxing authorities.
Coinbase, Gemini, GDAX, and a number of others are considered a US-based institution.
The FATCA form is 8938, and is part of your tax-return. [06:15]
Andrew: It's very similar to the FBAR, but it's not exactly the same. One of the first differences is that the threshold for FATCA is higher. For the FBAR, your aggregate maximum holdings have to exceed $10,000. Aggregate meaning that when you add your bank accounts or crypto exchanges together, the maximum during the year exceeds $10,000.
The FATCA threshold, for a single person, is $50,000. FATCA, just like the FBAR, is an informational form, which means again, there's no tax due. The government just wants to know the maximum value of each account. One of the other differences is that FATCA is more general, so FBAR only requires foreign bank accounts to be recorded, whereas FATCA is both bank accounts and foreign assets.
There's no tax involved with these forms - but there are significant penalties for not filing when required to do so. [07:57]
Andrew: The penalties for not filing an FBAR can be very severe. One of the most basic penalties for not filing an FBAR is $10,000 per year - for non-willful offenders.
If you were willful and you just disregarded your requirement to file? Well then the penalties can be even higher - up to 75% of the maximum value of your account or your exchange values. It can be very severe. So while there's no tax, the penalties are much greater. It's one of those things to do to comply with the rules.
The FATCA form also has similar penalties.
The burden of proof for "non-willfulness" is on you. [10:14]
Andrew: To be able to prove that you are not-willful is very difficult. In general, if you file and sign your tax returns, you are signing under penalties of perjury that everything is correct. You have an obligation to know the requirements and just saying "I didn't know the law" is not sufficient proof of non-willfulness.
If you've exceeded these limits in previous years, but didn't file these forms, there are still feasible options to consider…but these options may not last forever. [16:25]
Andrew: I would suggest that if you met these requirements in earlier years, take corrective action to amend or file the returns properly. There are some IRS programs that are available to come forward and file these forms for earlier years with a reduced penalty - or in some cases, no penalty at all.
The IRS Streamlined Offshore Disclosure Program. Under this program, you have to be non-willful and you will actually self-certify - so you'll sign a statement saying I didn't file the FBAR because I basically didn't know about it. There are some other requirements to be aware of as well. In this program, you'll pay a five percent penalty on the maximum balance of your foreign exchange value.
submitted by Sal-BitcoinTax to BitcoinMarkets [link] [comments]

BitcoinTaxes Podcast: FBAR & FATCA Filing for Crypto Traders

BitcoinTaxes Podcast Link
Guest: Andrew Gordon, ESQ.
Topic: FBAR & FATCA Filing for Crypto

Summary:
Our guest, Andrew Gordon, is a tax attorney who understands the ins and outs of foreign account reporting in relation to cryptocurrency trading. Andrew joins us to discuss FBAR & FATCA reporting, the penalties associated with not reporting, and to address whether he believes crypto traders should be filing these forms.
Andrew has been working in the crypto-space since 2014. [00:24]
Andrew: Actually several years ago, ago in 2014, we had a client approach us who was getting paid "magic internet money", from the Ethereum Foundation. Back then the IRS had not released any guidance - it wasn't till later in 2014 that the IRS even defined Crypto as property. That was our first introduction and we were and presented the question of, well, if I'm getting paid these random tokens called Ethereum, how do we account for this?
In terms of foreign account reporting, there's two main forms you need to know about: FBAR & FATCA. The FBAR is a separate form that is due the same day as your returns. [02:42]
Andrew: FBAR is my favorite four letter word. It stands for "Foreign Bank Account Report". It isn't actually filed with your tax return. It's a separate form. It's filed online, electronically. It has the same due dates as your tax returns - April 15th and it can be extended six months to October 15th. So same due dates, but it's filed differently, still sent to the Department of Treasury - it's a separate form.
On the FBAR form, what taxpayers have to do is they have to identify the maximum value at any time during the tax year of their foreign bank accounts. If that value at anytime exceeded $10,000, you have to report. The FBAR is an informational form, which means that there's no tax actually owed.
There are popular exchanges that ARE considered foreign entities and some that are NOT considered foreign entities.[04:15]
Andrew: Unfortunately, it's not that easy because a lot of exchanges don't even make their address public - it's pretty hard to find. Even just as a starting point, I would list out all of the exchanges that you've used and try to use Google to find their addresses.
There's a couple that we know are considered foreign financial institutions at this point, and the most popular is Binance. In addition, many people suspect that Bitfinex has kind of self-reported themselves as a foreign financial institution and their information is being shared with taxing authorities.
Coinbase, Gemini, GDAX, and a number of others are considered a US-based institution.
The FATCA form is 8938, and is part of your tax-return. [06:15]
Andrew: It's very similar to the FBAR, but it's not exactly the same. One of the first differences is that the threshold for FATCA is higher. For the FBAR, your aggregate maximum holdings have to exceed $10,000. Aggregate meaning that when you add your bank accounts or crypto exchanges together, the maximum during the year exceeds $10,000.
The FATCA threshold, for a single person, is $50,000. FATCA, just like the FBAR, is an informational form, which means again, there's no tax due. The government just wants to know the maximum value of each account. One of the other differences is that FATCA is more general, so FBAR only requires foreign bank accounts to be recorded, whereas FATCA is both bank accounts and foreign assets.
There's no tax involved with these forms - but there are significant penalties for not filing when required to do so. [07:57]
Andrew: The penalties for not filing an FBAR can be very severe. One of the most basic penalties for not filing an FBAR is $10,000 per year - for non-willful offenders.
If you were willful and you just disregarded your requirement to file? Well then the penalties can be even higher - up to 75% of the maximum value of your account or your exchange values. It can be very severe. So while there's no tax, the penalties are much greater. It's one of those things to do to comply with the rules.
The FATCA form also has similar penalties.
The burden of proof for "non-willfulness" is on you. [10:14]
Andrew: To be able to prove that you are not-willful is very difficult. In general, if you file and sign your tax returns, you are signing under penalties of perjury that everything is correct. You have an obligation to know the requirements and just saying "I didn't know the law" is not sufficient proof of non-willfulness.
If you've exceeded these limits in previous years, but didn't file these forms, there are still feasible options to consider…but these options may not last forever. [16:25]
Andrew: I would suggest that if you met these requirements in earlier years, take corrective action to amend or file the returns properly. There are some IRS programs that are available to come forward and file these forms for earlier years with a reduced penalty - or in some cases, no penalty at all.
The IRS Streamlined Offshore Disclosure Program. Under this program, you have to be non-willful and you will actually self-certify - so you'll sign a statement saying I didn't file the FBAR because I basically didn't know about it. There are some other requirements to be aware of as well. In this program, you'll pay a five percent penalty on the maximum balance of your foreign exchange value.
If you enjoyed our podcast, be sure to check back frequently for more great discussions about a range of topics in the crypto space. If you have any questions for Andrew Gordon, he can be reached via his website, Gordon Law LTD, or via Twitter @Accounting.
If you would like to request a topic for an interview, or have any questions related to this podcast, be sure to reach out to us at [email protected].
submitted by Sal-BitcoinTax to bitcointaxes [link] [comments]

US Tax Guide for Cryptocurrencies

Introduction:  
Greetings, cryptax! Tax season is upon us, and in the next couple of months, taxpayers across the US will be filing their 2017 tax returns. As a tax professional, an Enrolled Agent, and a cryptocurrency investor and enthusiast, I wanted to write up a brief guide on how your investments in cryptocurrencies are taxed in the US.
 
 
1. Are cryptocurrency realized gains taxable?
Yes. The IRS treats virtual currency (such as cryptocurrency) as property. That means if you sell BTC, ETH, or any other cryptocurrency that has appreciated in value, you have realized a capital gain and must pay taxes on this income. If you held the position for one year or less, it is a short-term capital gain which is taxed at your ordinary income tax rate. If you held the position for more than one year, it is a long-term capital gain which is taxed at your long-term capital gains tax rate. In most cases, this is 15%, but could also be 0% or 20% depending on your specific ordinary income tax bracket.
 
2. If I sell my BTC for USD on Coinbase but do not transfer the USD from Coinbase to my bank account, am I still taxed?
Yes. The only thing that matters is that you sold the BTC, which creates a taxable transaction. Whether you transfer the USD to your bank account or not does not matter.
 
3. If I use my BTC to buy another cryptocurrency (XMR for example), is this a taxable transaction?
Most likely yes. See #4 below for a more detailed explanation. If assuming crypto to crypto trades are not able to be like-kind exchanged, then continue on to the next paragraph here.
This is actually two different transactions. The first transaction is selling your BTC for USD. The second transaction is buying the XMR with your USD. You must manually calculate these amounts (or use a website such as bitcoin.tax or software to calculate it for you). For example, I buy 1 BTC for $8,000 on Coinbase. Later on, the price of 1 BTC rises to $9,000. I transfer that 1 BTC to Bittrex and use it to buy 38 XMR. I have to report a capital gain of $1,000 because of this transaction. My total cost basis for the 38 XMR I purchased is $9,000.
 
4. If I use my BTC to buy another cryptocurrency, could that be considered a tax-free like-kind exchange?
Probably not. The new tax law says that like-kind exchanges only pertain to real estate transactions. This was done with Section 13303, which replaced “property” with “real property” for all of Section 1031 (page 72 near the bottom). My personal interpretation:
In 2018 and going forward, cryptocurrencies can definitely not be like-kind exchanged.
In 2017 and before, it is a very gray area. I personally am not taking the position that they can be like-kind exchanged, because if the IRS went after a taxpayer who did this, the IRS would probably win and the taxpayer would owe taxes, interest, and probably penalties on every single little gain made from trading one cryptocurrency for another.
Here is a great interpretation of why trading cryptocurrency for cryptocurrency is probably not a like-kind transaction.
In my opinion, the biggest factor is that like-kind exchanges must be reported on Form 8824 and not just ignored. Therefore, if a taxpayer is claiming like-kind exchanges on crypto to crypto exchanges, he or she would have to fill out a Form 8824 for each individual transaction of crypto to crypto, which would be absolutely cumbersome if there are hundreds or thousands of such trades.
Another is that there has to be a Qualified Intermediary that facilitates a like-kind exchange. So, it's a more involved process, and that's why I think cryptocurrency cannot be like-kind exchanged.
Here is another article about like-kind exchanges.
Here is the American Institute of CPAs' letter to the IRS, dated June 10, 2016, asking them to release guidance on whether crypto to crypto can be like-kind exchanged or not. The IRS has not responded to the letter.
 
5. How do I calculate the realized capital gain or loss on the sale of my cryptocurrency?
The realized gain or loss is your total proceeds from the sale minus what you purchased those positions for (your cost basis). For example, you bought 1 BTC for $3,000 in June of 2017. In December of 2017, you sold that 1 BTC for $18,000. Your realized gain would be $18,000 - $3,000 = $15,000. Since you held it for one year or less, the $15,000 would be a short-term capital gain taxed at your ordinary income tax rate.
 
6. Which BTC's cost basis do I use if I have multiple purchases?
The cost basis reporting method is up to you. For example, I buy my first BTC at $3,000, a second BTC at $5,300, and a third BTC at $4,000. Later on, I sell one BTC for $8,000. I can use:
FIFO (first in first out) - cost basis would the first BTC, $3,000, which would result in a gain of $5,000.
LIFO (last in first out) - cost basis would be the third BTC, $4,000, which would result in a gain of $4,000.
Average cost - cost basis would be the average of the three BTC, $4,100, which would result in a gain of $3,900.
Specific identification - I can choose which coin's cost basis to use. For example, I can choose the second BTC's cost basis, $5,300, which would result in the lowest capital gains possible of $2,700.
The IRS has not given any guidance on cost basis accounting methods for cryptocurrency, but I am taking the position that any method can be used, and that you can change your method at any time as you please (e.g. FIFO for one year, LIFO for another. Or, FIFO for the sale of a specific lot, then LIFO for the sale of another lot on the same day).
 
7. If I end up with a net capital loss, can I claim this on my tax return?
Capital gains and capital losses are netted on your tax return. If the net result of this is a capital loss, you may offset it against ordinary income on your tax return, but only at a maximum of $3,000 per year. The remaining losses are carried forward until you use them up.
 
8. What is the tax rate on my capital gains?
If long-term, the tax rate is 0%, 15%, or 20%, depending on your ordinary income tax bracket. If short-term, the tax bracket you’ll be in will depend on your total income and deductions. The ordinary income tax brackets are 10%, 15%, 25%, 28%, 33%, 35%, and 39.6% in 2017 and 10%, 12%, 22%, 24%, 32%, 35%, and 37% in 2018 and going forward.
Here are the 2017 and 2018 ordinary income tax brackets.
Here are the 2017 and 2018 long-term capital gains tax brackets.
Here is a detailed article on how the calculation of long-term capital gains tax work and how you can take advantage of the 0% long-term capital gains rate, if applicable.
 
9. If I mine BTC or any other cryptocurrency, is this taxable?
Yes. IRS Notice 2014-21 states that mining cryptocurrency is taxable. For example, if you mined $8,000 worth of BTC in 2017, you must report $8,000 of ordinary income on your 2017 tax return. For many taxpayers, this will be reported on your Schedule C, and you will most likely owe self-employment taxes on this income as well. The $8,000 becomes the cost basis in your BTC position.
 
10. How do I calculate income for the cryptocurrency I mined?
This is the approach I would take. Say I mined 0.01 BTC on December 31, 2017. I would look up the daily historical prices for BTC and average the high and low prices for BTC on December 31, 2017, which is ($14,377.40 + $12,755.60) / 2 = $13,566.50. I would report $13,566.50 * 0.01 = $135.67 of income on my tax return. This would also be the cost basis of the 0.01 BTC I mined.
 
11. Can I deduct mining expenses on my tax return?
If you are reporting the income from mining on Schedule C, then you can deduct expenses on Schedule C as well. You can deduct the portion of your electricity costs allocated to mining, and then you depreciate the cost of your mining rig over time (probably over five years). Section 179 also allows for the full deduction of the cost of certain equipment in year 1, so you could choose to do that if you wanted to instead.
 
12. If I receive BTC or other cryptocurrency as a payment for my business, is this taxable?
Yes. Similar to mining, your income would be what the value of the coins you received was. This would also be your cost basis in the coins.
 
13. If I received Bitcoin Cash as a result of the hard fork on August 1, 2017, is this taxable?
Most likely yes. For example, if you owned 1 Bitcoin and received 1 Bitcoin Cash on August 1, 2017 as a result of the hard fork, your income would be the value of 1 Bitcoin Cash on that date. Bitcoin.tax uses a value of $277. This value would also be your cost basis in the position. Any other hard forks would probably be treated similarly. Airdrops may be treated similarly as well, in the IRS' view.
Here are a couple more good articles about reporting the Bitcoin Cash fork as taxable ordinary income. The second one goes into depth and cites a US Supreme Court decision as precedent: one, two
 
14. If I use BTC or other cryptocurrency to purchase goods or services, is this a taxable transaction?
Yes. It would be treated as selling your cryptocurrency for USD, and then using that USD to purchase those goods or services. This is because the IRS treats cryptocurrency as property and not currency.
 
15. Are cryptocurrencies subject to the wash sale rule?
Probably not. Section 1091 only applies to stock or securities. Cryptocurrencies are not classified as stocks or securities. Therefore, you could sell your BTC at a loss, repurchase it immediately, and still realize this loss on your tax return, whereas you cannot do the same with a stock. Please see this link for more information.
 
16. What if I hold cryptocurrency on an exchange based outside of the US?
There are two separate foreign account reporting requirements: FBAR and FATCA.
A FBAR must be filed if you held more than $10,000 on an exchange based outside of the US at any point during the tax year.
A Form 8938 (FATCA) must be filed if you held more than $75,000 on an exchange based outside of the US at any point during the tax year, or more than $50,000 on the last day of the tax year.
The penalties are severe for not filing these two forms if you are required to. Please see the second half of this post for more information on foreign account reporting.
 
17. What are the tax implications of gifting cryptocurrency?
Small gifts of cryptocurrency do not have a tax implication for the gift giver or for the recipient. The recipient would retain the gift giver's old cost basis, so it could be a good idea for the gift giver to provide records of the original cost basis to the recipient as well (or else the recipient would have to assume a cost basis of $0 if the recipient ever sells the cryptocurrency).
Large gifts of cryptocurrency could start having gift and estate tax implications on the giver if the value exceeds more than $14,000 (in 2017) or $15,000 (in 2018) per year per recipient.
Here's a good article on Investopedia on this issue.
An important exception applies if the gift giver gives cryptocurrency that has a cost basis that is higher than the market value at the time of the gift. Please see the middle of this post for more information on that.
 
18. Where can I learn even more about cryptocurrency taxation?
Unchained Podcast: The Tax Rules That Have Crypto Users Aghast
IRS Notice 2014-21
Great reddit post from tax attorney Tyson Cross from 2014
 
19. Are there any websites that you recommend in helping me with all of this?
Yes - I have used bitcoin.tax and highly recommend it. You can import directly from an exchange to the website using API, and/or export a .csv/excel file from the exchange and import it into the website. The exchanges I successfully imported from were Coinbase, GDAX, Bittrex, and Binance. The result is a .csv or other file that you can import into your tax software.
I have also heard good things about cointracking.info but have not personally used it myself.
 
20. If I move my BTC from one exchange to another, or into a hard wallet, is this a taxable event?
No - you are not selling anything, so no gains are realized.
 
21. Where do I report cryptocurrency sales on my tax return?
The summary of your sales would reported on Schedule D on line 3 and/or line 10 depending on short-term or long-term. Supplemental Form 8949 must also be included with Box C or Box F checked depending on short-term or long-term. Form 8949 is where you must list each individual sale.
 
22. If coins become lost or inaccessible (e.g. lost or forgotten passphrase or thrown away hard drive), can I claim that as a loss? What about coins that have gotten stolen? What about losing money in investment or ICO scams (e.g. Bitconnect or Confido)?
These are really tricky questions. Unfortunately, the potential to claim such a loss against ordinary income is very low, especially with the new tax law. At the very least, capital losses can be claimed, but the deduction is capped at $3,000 per year against ordinary income with the rest carrying forward indefinitely.
The new tax law changed the casualty and theft loss to only apply to presidential disaster areas, so at least in the case of a loss passphrase, I think the answer is no for 2018 and going forward. For 2017, the answer is possibly yes. Here is an article on the subject if you are interested in reading more.
 
23. Taxation is theft!
Sorry, I can't help you there.
 
 
That is the summary I have for now. There have been a lot of excellent cryptocurrency tax guides on reddit, such as this one and this one, but I wanted to post my guide on cryptax which hopefully answers some of the questions you all may have about US taxation of cryptocurrencies. Please let me know if you have any more questions, and I’d be happy to answer them to the best of my ability. Thank you!
Regarding edits: I may make many edits to my post after I originally post it. Please refresh to see the latest edits to my guide. Thank you.
 
Disclaimer:
The information contained within this post is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional.
Any U.S. federal tax advice contained in this post is not intended to be used for the purpose of avoiding penalties under U.S. federal tax law.
Presentation of the information via the Internet is not intended to create, and receipt does not constitute, an advisor-client relationship. Internet users are advised not to act upon this information without seeking the service of a tax professional.
submitted by Nubboi to cryptax [link] [comments]

Bitcoin & IRS Auditing - A Podcast Discussion

I recently interviewed Alex Kugelman, a tax controversy lawyer - I asked him about IRS audits in relation to crypto trading. Below is a link to the podcast interview itself, as well as a summary I wrote up. Thought this would be a good place to post (let me know if I'm wrong about that).
BitcoinTaxes Podcast Link

Highlights:
IRS audits are a real possibility for anyone who has traded cryptocurrencies. Our guest today is Alex Kugelman, a tax controversy lawyer with an abundance of knowledge concerning cryptocurrency audits. He's here to share his expertise on IRS cryptocurrency audits, including risk reduction strategies as well as enforcement predictions and misconceptions.
Alex Kugelman specializes in IRS audits. His experience includes four years of Federal government court experience at the U.S. Tax Court and a U.S. District Court. [00:40]
Alex: I'm an attorney out in California. I clerked for a US District Court judge and as well as the United States Tax Court. I've been in private practice exclusively doing tax controversy work for the past five years or so. I kind of got involved with crypto towards the end of 2016. I tended to represent clients mainly with compliance & disclosure issues with respect to cryptocurrency. I just really like it. Really interesting area.
The Coinbase summons in 2018 played a major role in Alex's interest in crypto audits. [01:19]
Alex: What started me into the crypto space was when the IRS first issued summons for Coinbase. We started getting some interesting calls regarding that. And at that time I thought to myself, this might be an interesting area. So I started following the actual summons enforcement proceeding at the District Court here in San Francisco - from there kind of worked with people under different types of compliance, including international disclosures. Now we're starting to see some of the first cryptocurrency audits come through.
First, let's get a brief rundown of how IRS audits work. [02:00]
Alex: It is important to understand the IRS as an administrative agency and all different layers of it. So when it comes to an audit the term that the IRS uses is an examination and there's three basic levels.
The first is a correspondence exam. That's where you get a letter that says, dear taxpayer, so-and-so reported that you had $100 of interest income that wasn't on your tax return - we're going to increase your tax. If you want to challenge that, you can. And that's basically termed an under reporter notice. That's probably not going to be a cryptocurrency audit if you get that notice.
The next one is an office exam. That is someone in the local IRS office sending you a letter that says, we have selected a certain tax return for audit and we're going to look at these issues. We'd like you to call us to schedule an appointment. That's going to be usually a tax compliance officer that is doing that.
The third and probably the most serious level of exam is a field examination. That's also going to be a local IRS representative, typically a revenue agent. There, the revenue agent may come to your work or ask come to your work or business to kind of conduct the audit.
All three of those are going to start the same: a letter that's sent to you at your most recent address provided to the IRS.
Cryptocurrency audits follow a similar protocol. [05:40]
Alex: I think it's likely that most crypto audits are going to start with one of two things happening. One is that there is information from the Coinbase summons that is inconsistent with what was on a taxpayer's tax return. I think for someone who's involved with that issue, they're going to have a good sense of that one because they should've gotten an email notice from Coinbase.
Or two, the audit notice is going to identify older tax years - 2013, 2014 or 2015 because those are the years that the information related to.
Another reason I think people will get audited is going to be because information on the return is incomplete, in the sense that the taxpayer or the cryptocurrency owner reports some transactions, without enough detail to figure out the actual cost basis.
Does reporting your data in an aggregated fashion increase your chances of being audited? [06:45]
Alex: I mean one - to the extent that there's going to be a lot of taxpayers - a lot of people use TurboTax, right? If that's the way TurboTax is preparing all of those returns, it would seem to me you're kind of in a herd of people like that. And at least it's consistent with what a lot of people are doing. The second part of that is going to be at least those people who have prepare the returns in that manner, they're going to, or should have, the underlying data. So even if it's an aggregate reporting of each asset class as opposed to each individual trade, if there ever were questions then you're going to have your CSV files, you're going to have your Bitcoin.tax exports, you're going to have all the information that you need to back that up.
Alex is an advocate of over-reporting your information to the IRS. [09:30]
Alex: I'm a big proponent of over-reporting - and I don't mean paying too much tax. I just mean including too much information. Because at some point there's kind of two ways that your returned can be flagged: a computer flags the return for some reason or there's a special unit or a person who actually flags it. At the end of the day, a human being will be looking at that return and deciding whether it actually is going to go all the way through to an audit. I want them to completely understand what's being reported, why it's been reported, and if there's too much information, that's fine - it's less likely that someone's going to have more questions.
A crypto audit is very likely to be a field exam - and it's important to hire a good rep. [11:00]
Alex: It's very likely going to be a field exam, which means you're going to have a revenue agent - and those are kind of the best of the best auditors for an IRS audit. And remember - an IRS audit is a civil matter. It is not criminal at this point. Again, it's unlikely that it will become criminal. It is, however, the highest level of audit you're going to get.
If you're going to hire a representative, which you have every right to do, you should contact that person, let them know what's going on and probably have them interface with the auditor. You should receive, as part of the opening notice or letter, the information document request - which is identifying what things to bring for the auditor. Also, it'll tip to what topics might be important. For example the typical things you're going to see will be bank statements, financial or asset account statements, which I view as requesting exchange statements or exchange CSV files. Any documents that show the cost basis for your cryptocurrency trades.
Audits are more art than science. [13:35]
Alex: The auditor has a fair amount of power. So if you play real hardball - that's not going to prevent the auditor from expanding to other years. So when you get that audit notice ,and let's say that you're going to deal with this yourself, the first thing you want to kind of figure out is what are the areas that I wouldn't want to go into, and what are the areas that I don't have good records? That will help guide the way to respond or what information to pull together.
The reality is, and let's just be honest here - for most people reporting cryptocurrency gains, they have all of the information. The IRS does not have much. They might have some records from Coinbase, but it's not as if they have a treasure trove of third party data.
The burden is really going to be, in every audit, on the taxpayer to prove their tax return is correct.
It's difficult to say how lenient the IRS will be regarding past years. [15:35]
Alex: I think the way that I would look at it is that maybe the standard of of records required to really substantiate older years might be a little bit lower for older years as opposed to now because it's different now. There's a lot better information provided by some of the exchanges. There's a lot more software out there to help you, especially for people who are newer to crypto. You should have access to all your bank records. You should still have a lot of emails, reflecting on-ramping off-ramping, or other purchases. You should be able to kind of pull this all together.
I can understand when we have clients who come in and are early adopters and they're missing chunks of information. So I do think that in those types of circumstances, yes, I think there would be a little bit of leniency. But I don't think if you're asking, hey, I reported my gains in 2017 but I never really did it 14, 15 or 16 - I don't think that's going to be viewed very favorably.
It is possible to substantiate your data without all of your records. [19:00]
Alex: I think the first thing is, I mean, outside of cryptocurrency and just generally in audits, how many people have complete records to support everything on their tax return from three years ago? Right? It's just not the reality.
The best source of information in a lot of these cryptocurrency clients are the clients themselves. They kind of know what they did and they can remember. There's some who take good notes and other people don't, but as you go through and ask people: what exchanges have you've been on, what type of coins, if you bought any ICOs, have you ever sold for actual US cash, and have you ever bought goods or services? As you talk through things people tend to recall what happened. We use that information and we cross check that against bank statements, as well as CSV files, to pick out what those transactions look like.
Most people have some sort of records, at least reflecting the transfer in and the transfer back out of that exchange. So you can use historical data and historical pricing information to essentially estimate what that transaction would have been. And then what we do is we provide a written statement summary of what we're doing and why we're doing it.
The other big one that we see all the time - and anybody listening to this, please hear this, do not trade for your friends on your exchange accounts - because that type of commingling causes such major problems. Essentially you are walking into those taxable gains just because you're allowing someone access to the exchange to make sales.
If you need representation for an audit, get representation. [23:00]
Alex: My general rule is that I think experienced representatives are really important. I probably would not hire the CPA that prepared my return unless they were: one, experienced with being a representative in audits. And two, you felt comfortable that they weren't going to go in there with a conflict of interest. But I do think if you're worried about going into audit - hiring a skilled, and experienced rep is really, really important.
If they're experienced with this, they should understand the appropriate ethical standards and go in there and essentially help resolve portions of the audit and move it to a resolution that you can deal with.
Taxpayers actually have a lot of leverage in an audit. And that sounds crazy to say, but there is a lot of truth to that. And so as you're kind of working through the audit itself, you want to make sure that you're not just agreeing to something to be done with it. You're not agreeing to something just because you think that you'll get in more trouble or get a worse result otherwise.
There are important risk-reduction strategies you can utilize to avoid a crypto audit. [28:15]
Alex: The first thing that you really want to do, is just assess; for those of you that are really worried about an audit - just assess what it is you've actually done over the years. When did you start trading, what exchanges were you on, do you have records that reflect on-ramping and off-ramping? And that's going to be your bank account statements. Do you know where you've been, what exchanges you've been on?
For foreign exchanges, there may not be as much of that AML & KYC compliance, but I really believe that you do have reporting requirements under FATCA for FBAR and something called an 8938, which if you listen to the podcast with Tyson, he kind of explains what that is. But it's basically if you have ownership of a foreign bank account or asset, you have certain reporting requirements, whether you've had income or not.
You want to make sure you at least track when you've actually exchanged crypto for cash or vice versa. That's partly because that's one of those areas where when people can get in trouble with some sort of federal investigators - because those types of transactions can be potentially considered money laundering.
For those who believe that they've used like-kind exchange rules to defer taxable gains -you should look on your tax returns to see if you filed the form 8824, which is where like kind exchanges are actually reported. That kind of goes back to the over reporting issue I was talking about before. I think that if you didn't report the actual trades that you're taking like-kind treatment for in past years, I don't know that you've actually taken like-kind treatment to be frank with you. I think, objectively, that might be viewed as just not reporting certain transactions.
You want to make sure that you address these issues sooner rather than later.
1099-K forms can be misleading - to the recipient and, potentially, the auditor. [32:40]
Alex: A 1099-K is actually a merchant processing third party information returns. And it really is typically associated with people who have credit card sales - so it's going to reflect a gross amount and typically on a monthly basis.
It shows the gross amount and what I've seen too is that sometimes transfers actually get caught into that amount as well. So it's not even just gross sales or purchases - it may have other information. So the 1099-K can be really inflated. That's why reconciling that against accounting records is really, really important because that is one of those issues that I think could lead to an exam.
To those who think crypto isn't beholden to tax laws: you are not correct. [37:38]
Alex: The current commissioner of the IRS is Charles Rettig, and he's a really well known practitioner in tax controversy. I know from people that know him well, that he's actually mentioned Reddit as one of the reasons that cryptocurrency enforcement is his number one enforcement priority right now.
The other person that I've seen speak a couple of times is the head of the IRS Criminal Investigation Unit. His name is Don Fort and every year he does a presentation at the National Tax Controversy and Criminal Tax Conference. The last two years cryptocurrency has been number two and number one on his list. As much as the IRS lacks the funding and the manpower that it needs for all the enforcement, the IRS CI are really, really good and they are probably best agency at dealing with cryptocurrency enforcement issues.
I really think that it's gaining steam and I think once the audits from the Coinbase summons kind of get going, I think it's going to be a really scrutinized area. I think the people who have gone through the cost and the pain of disclosing and amending returns and doing everything they can will be happy that they did in a couple of years. I think the other people are going to be sweating it out - I don't know if it's ever really worth it to be honest with you. I would recommend people do their best to get in compliance.
In summary: do your best to report your crypto gains and losses - and don't try to pull one over on the IRS. [42:36]
Alex: For people who have potential issues with past years, one is getting a consistent record and just amending your past years, so they're consistent.
For people who have the foreign account issues - let's just say, for example, had an account with Binance, and that Binance account was never reported. The IRS has disclosure programs that allow you to amend certain returns, pay the tax that you report and pay a penalty, which would be 5% of the the highest account value that you have.
For people who don't want to deal with this, I think taking evasive steps is the best way to get the worst result possible. One of the things that I learned very early in dealing with audits and tax compliance, is that you can always make things worse. I think you really just want to address it and resolve the issue while you have a good opportunity.
We may see criminal prosecution of some of the "big fish" tax evaders from the Coinbase summons. [46:43]
Alex: Yeah, and I think the two things that I'm fairly certain we're going to see: one is we're going to see the IRS use the information provided by Coinbase to start auditing the biggest account holders from that period. I think that's very likely.
Probably the second one that I would say is very likely is that you're going to see limited criminal prosecutions related to cryptocurrency. And these are going to be people that have some sort of level of notoriety, whether actually famous or maybe famous in the cryptocurrency world. That's typically how the IRS and Department of Justice uses limited resources to prosecute criminal tax tax crimes.
Alex is a great guy to reach out to with any audit-related questions, crypto or otherwise. [48:50]
Alex: You can go to my website: www.kugelmanlaw.com. You can email me at [email protected]. I have clients all over the country, international clients. If you need any sort of help, whether that's representing you, or at least doing the nitty gritty audit investigation, we're always willing to talk to people and help them out as best we can.
---
If you would like to request a topic for an interview, or have any questions related to this podcast, you can reach out to me at [email protected].
submitted by Sal-BitcoinTax to btc [link] [comments]

CRYPTO TAXES TUTORIAL - Coinbase Report Tool & IRS Guidelines Binance.US - CryptoTrader.Tax Demo  Automating Your Crypto Tax Reporting Binance Hacked? Withdrawals Suspended. Users Reporting API Compromise Cryptocurrency Taxes: How To Keep Track of Your Crypto Gains & Report Your Tax Returns To The IRS Binance Hack, Canadian Cannabis, & IRS Tracks Fraudsters - Bitcoin & Cryptocurrency News Bitcoin + IRS, SEC Bitcoin ETF, Binance In China, Ethereum Use Case & Bitcoin Price Rise STOP! What you NEED to know about IRS form-8949 for crypto Binance Trading Resumes and The IRS Goes After Crypto Tax Evaders Bitcoin Anxiety Phone, MyEtherWallet War, IRS, Russian Scientists, Binance Binance Tax Reporting - Instant Tax Forms  CryptoTrader.Tax Demo

An essential overview of reporting obligations under FBAR and FATCA. Many individuals who entered crypto space assume anonymity. Those who were early miners may have gotten some of that anonymity but those who have started buying, trading and transferring their first Bitcoin and other cryptocurrencies were shaken up when IRS won the court grant to subpoena Coinbase to gather taxpayer ... Binance. Binance’s New Platform Will Connect CeFi and DeFi With $100M Fund . Muyao Shen Sep 10 ... IRS Warnings to Bitcoin Traders Offer Clues to Coming Tax Guidance . Aug 12, 2019 at 08:00 UTC ... CryptoTrader.Tax, Bitcoin.tax and Cointracking.info will help you figure out your transaction history, how much you owe and how to fill out the 1040 form for reporting capital gains or losses. Non-US Exchanges. It may occur to you that if no one is reporting your capital gains to the IRS, no one really knows about your investments. E.g. you are ... Binance is a huge platform. In fact, it’s the biggest in the world as of 2018 when measured by aggregate trading volume. Currently, people who use Binance can do business in more than 100 different types of cryptocurrencies. For U.S. citizens who use Binance, the big question is “Does Binance report to the IRS?” In addition to that topic ... The IRS first unveiled the draft of this form in October, as news.Bitcoin.com previously reported. The form is now finalized and posted on the IRS website for use in filing 2019 tax returns. Form ... The latter focuses largely on hard forks and airdrops. News.Bitcoin.com has also published a list of useful tax tools to help crypto owners. Crypto Is ‘An Important Focal Point for the IRS in ... Coinbase reporting (1099-K & B), subpoenas and 1040 schedule 1 are ways IRS knows you ow crypto taxes. You should report crypto taxes whether IRS knows about it or not. Crypto trading giant Binance created a corporate plan for profiting from the U.S. market while avoiding regulatory scrutiny, Forbes reported, citing a leaked document. Coinbase Releases IRS Guidance to Reporting and Paying Cryptocurrency Taxes for Investors. by AnTy. March 24, 2019. Home Exchanges Coinbase. Facebook. Twitter . Telegram. ReddIt. Linkedin. Email. Did you use, sell, or convert cryptocurrencies in 2018? If your answer is yes, you may owe taxes as a US taxpayer. There is a lot of confusion regarding this but one thing is sure, you are required to ... Coinbase may be reporting your trade activity to the IRS even if you’ve only been trading recently in the 2018, 2019, and 2020 tax years. They are doing this by sending Form 1099-Ks . According to Coinbase, if you had at least 200 orders during the tax year, with the total value of those orders equal or greater than $20,000k, then you would have received a 1099-K.

[index] [4239] [486] [14807] [17729] [22936] [12601] [14709] [1472] [9935] [7495]

CRYPTO TAXES TUTORIAL - Coinbase Report Tool & IRS Guidelines

Bitcoin + IRS, SEC Bitcoin ETF, Binance In China, Ethereum Use Case & Bitcoin Price Rise The Modern Investor. Loading... Unsubscribe from The Modern Investor? Cancel Unsubscribe. Working ... This demo shows how you can connect your Binance US account to CryptoTrader.Tax to automate your cryptocurrency tax reporting. Simply import your trades and ... This video demonstrates how you can import your Binance trades into CryptoTrader.Tax to generate one-click tax reports. For more information on doing your Bi... SPECIAL PROMOTION INSIDE! This is the ultimate guide on how to report your income tax and keep track of your cryptocurrency gains taxes for your yearly tax returns. The government has changed the ... Bitcoin and cryptocurrency news - Syscoin blockchain compromised, Binance APIs hacked, IRS forming the ultimte boy band, Ugandan government cracks down on social media, Marijuana is the new ... In this video I look at how Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ripple all moved up today. Also, talk about Binance coming back online, John McAfee, and IRS going after Tax Evaders ... #IRS #TAXES #CRYPTO Squaaaddd! Whats up Bitsquad, you NEED to watch this video to find out why you should be careful with form 8949 for crypto currency Join #ɃitSquad, SMASH THE LIKE, AND DONT ... Bitcoin Anxiety Phone, MyEtherWallet War, IRS, Russian Scientists, Binance Ivan on Tech. Loading... Unsubscribe from Ivan on Tech? Cancel Unsubscribe. Working... Subscribe Subscribed Unsubscribe ... Need to report the video? Sign in to report inappropriate content. Sign in. Transcript; Add translations. 11,099 views. 312. Like this video? Sign in to make your opinion count. Sign in. 313 29 ... Binance is in the news once again due users reporting compromised accounts. Binance acted very quickly and suspended withdrawals on accounts. We are still waiting for more updates.

#