REUTERS/Bobby
Yip


  • Coinbase was
    forced to turn over account data
    last week, in a
    desperate attempt to catch up with current
    technologies. 
  • The government had every opportunity to set the rules
    for the 21st century with its latest tax bill. But it failed
    miserably.

The same day Bitcoin cracked its all-time high above $11,000,
the government dealt its first blow to the crypto world…

On Wednesday, a federal judge in San Francisco
ordered the popular Bitcoin exchange, Coinbase, to provide the
IRS with information on over 14,000 account holders.

The taxman noticed that only 800-900 people reported gains
related to Bitcoin in each of the years between 2013-2015. It
seemed unusual given Bitcoin’s meteoric rise.

So the IRS went for its pound of flesh.

But Coinbase pushed back… and the government agreed to only
take limited data (including name, date of birth, address, tax
ID number, transaction statements and account logs) for
accounts that have bought, sold, sent or received at least
$20,000 worth of Bitcoin in a given year.

Don’t say I didn’t warn you about Coinbase. I told
Sovereign Man: Confidential readers last month:

If you’re tempted to purchase Bitcoin from the popular
Coinbase exchange, don’t bother.

They’ve sold out to regulators.

The IRS is calling this a “partial win.” But you can be sure,
there will be a public beheading. This is something governments
almost always do.

They’ll find a prominent Bitcoin person, someone that’s
polarizing to the public – like “pharma bro” Martin Shkreli. It
will be a very public trial… and they’ll throw his ass in the
slammer.

Government’s always do this because they want to scare people.

Kim Dotcom is the perfect example. Kim
founded the popular file-sharing site Megaupload
.

The government wanted to stop illegal downloads, so they raided
his guy’s house in New Zealand for violating US law.

The government also does this for taxes… everything, really.

Look at Wesley Snipes. The IRS accused him of felony tax
evasion. He spent three years in jail.

They had to take a celebrity and throw him in jail to scare
everyone else.

Back to Bitcoin…

Now that it’s at all-time highs, the government wants its
piece.

I read the 400+ pages of the proposed tax code. How many lines
in there do you think deal with cryptocurrency? ZERO.

How many lines deal with e-commerce? ZERO.

The government had every opportunity to set the rules for the
21st century. And they failed miserably.

So the rules remain as clear as mud.

Instead of trying to make it clear, their tactic is
intimidation, force and coercion.

This is just the beginning. There will be more.

And my advice is don’t be one of those guys.

Every transaction that you make in Bitcoin is potentially a
taxable event.

Let’s say you bought Bitcoin for $1,000 and after it went to
$10,000 you buy a business class trip to Australia for $10k.
When you pay the airline with one Bitcoin, you’ve just
triggered a taxable event.

The IRS would say that you essentially sold your Bitcoin, have
a $9k gain and used those proceeds to buy the ticket.

Which means you owe the IRS capital gains tax on $9k, which is
20% plus the Obamacare surcharge.

So, don’t be that guy. If you’ve been doing this, trust me, you
don’t want the IRS find out.

You’d rather come forward yourself and disclose it and pay
taxes… Rather than be the next Martin Shkreli.

Get the latest Bitcoin price here.>>

Read the original article on Sovereign Man. Copyright 2017.

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