[PLUG-TALK] Bitcoins to be treated as intangible asset, not currency, by IRS

Keith Lofstrom keithl at gate.kl-ic.com
Sun Mar 30 20:29:11 UTC 2014


On Wed, Mar 26, 2014 at 05:50:11AM -0700, Michael Rasmussen wrote:
>   Anyone involved in transactions involving digital currencies will be
>   subject to the same record-keeping requirements, and taxes, as those
>   making stock transactions and other deals.
> 
>   Under the new rules, paying for a beer in bitcoin would be a taxable
>   event with the buyer having to work out if they had made any capital
>   gain on the asset they had just sold.

The Al Capone gambit.  They got him for tax evasion, not murder.
Capone got rich bootlegging alcohol.  In the end, his customers won
and the government repealed the 18th amendment and prohibition.  

Read the book "Smuggler Nation" by Peter Andreas, which tells how the
British North American colonies got rich via smuggling and educated via
copyright infringement.  At the time of the revolution, the 13 colonies
were 50% richer per capita than the home island.  Parliament imposed
new taxes and started enforcing old ones in the 1760s to pay for the
ruinuous cost of the Seven Years War in Europe, started by George
Washington's attack on a French expedition, killing an ambassador. 
It seemed like a good idea at the time ...

The taxes and confiscations upset business as usual.  The treaties
ending the war set aside the trans-Appalachians for native Americans. 
Americans were more competent wilderness fighters than British land
armies.  So, revolution against a huge but ineffective empire.

Yes, the government can add petty reporting requirements for bitcoins.
Now that they've made keeping bitcoin account books manditory, they
have made unreported separate account books easy.  Which will, over 
the years, pit the hackers against the NSA, Axiom, Experian, and the
Facebooks and Googles that feed them with information.  Not sure how
that will turn out, but a trading culture with bootlegging in its DNA
isn't likely to docilely accept impediments to buying beer and porn.

Keith

-- 
Keith Lofstrom          keithl at keithl.com



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