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I think this is a pretty reasonable request if they only want Americans who traded bitcoin. The IRS and SEC have the power to compel brokerages to turn over tr

I think this is a pretty reasonable request if they only want Americans who traded bitcoin. The IRS and SEC have the power to compel brokerages to turn over trading records for people who bought/sold stocks on the stock market so the precedent is not only set but well established long, long, long ago. I mean if you traded bitcoin but didn't claim the income on your taxes, then you just blatantly and almost certainly knowingly/intentionally lied on your taxes. I'm not certain what there is to argue about or push back on here. It's not like you can create something new like bitcoin and then with a straight face claim that its not an equity or currency so the law doesn't apply to you. Capital gains are taxable, full stop, unless there is a specific law to override that, like selling your primary residence. Can someone make the case that this isn't just a cut and dry issue?

tyingq 10y ago
Conflating coinbase with a brokerage seems a stretch to me. Many people used it more like Paypal, a conduit to make or receive payments for sales of goods or services. With the conversion of bitcoin to regular currency happening very quickly. No buy/hold/trade activity, etc.
- criley2 10y ago
  If you made money on ebay, deposited to your PayPal, and then spent elsewhere, and did not claim that money on your American taxes, you would be evading taxes by not reporting taxable income. Same here.
  - tyingq 10y ago
    But the IRS has not asked for Paypal to dump their entire database of all payments and customers.
    - unreal37 10y ago
      In fact they do. "Since 2011, PayPal has been required by the IRS to report the sales of goods and services for customers who, in a single year receive: More than $20,000 USD, AND 200 or more payments." [1] https://www.paypal.com/us/selfhelp/article/How-does-PayPal-report-my-sales-to-the-IRS-Will-I-receive-a-1099-tax-statement-FAQ729 https://www.paypal.com/us/selfhelp/article/How-does-PayPal-r...
      - tyingq 10y ago
        That is a significantly smaller subset than "all US customers and all US transactions". The point is that it's a fishing expedition.
        criley2 10y ago
        Well sure, they don't need to fish in USD, but they do need to fish in bitcoin. It is what it is, but if I dealt in bitcoin over that period of time, and my returns didn't reflect it, I would be talking to tax attorneys and filing amended returns BEFORE the IRS letters started, not after.
- derekp7 10y ago
  How does it work if you sold a service for bitcoin, and the value of the bitcoin changed befor converting to cash? I would think that regular taxes (income) would be owed on the initial cash value, then capital gains tax would be owed on the float. Same as selling something in a foreign currency?
  - tyingq 10y ago
    That's exactly the attraction coinbase had for many sellers (avoiding the volatility): https://www.coinbase.com/instant-exchange https://www.coinbase.com/instant-exchange
- optimuspaul 10y ago
  Well it is a currency exchange and does broker currency transactions. Seems like a brokerage to me.
- chollida1 10y ago
  > Many people used it more like Paypal, a conduit to make or receive payments for sales of goods or services. With the conversion of bitcoin to regular currency happening very quickly. No buy/hold/trade activity, etc. I'm glad you brought this up because it just strengthens my point. Paypal reports US account transactions to the IRS once they go over a certain size. https://www.paypal.com/us/webapps/mpp/irs6050w https://www.paypal.com/us/webapps/mpp/irs6050w
  - tyingq 10y ago
    So does coinbase.
mhluongo 10y ago
The IRS isn't supposed to use these powers to go on "fishing expeditions", according to its own manual[1]. Requesting info on millions of users without particular suspicion is more broad than necessary. [1] - http://www.forbes.com/sites/kellyphillipserb/2016/11/21/irs-wants-court-authority-to-identify-bitcoin-users-transactions-at-coinbase/#7e2c86e40d11 http://www.forbes.com/sites/kellyphillipserb/2016/11/21/irs-...

tyingq 10y ago

Conflating coinbase with a brokerage seems a stretch to me. Many people used it more like Paypal, a conduit to make or receive payments for sales of goods or services. With the conversion of bitcoin to regular currency happening very quickly. No buy/hold/trade activity, etc.

criley2 10y ago
If you made money on ebay, deposited to your PayPal, and then spent elsewhere, and did not claim that money on your American taxes, you would be evading taxes by not reporting taxable income. Same here.
- tyingq 10y ago
  But the IRS has not asked for Paypal to dump their entire database of all payments and customers.
  - unreal37 10y ago
    In fact they do. "Since 2011, PayPal has been required by the IRS to report the sales of goods and services for customers who, in a single year receive: More than $20,000 USD, AND 200 or more payments." [1] https://www.paypal.com/us/selfhelp/article/How-does-PayPal-report-my-sales-to-the-IRS-Will-I-receive-a-1099-tax-statement-FAQ729 https://www.paypal.com/us/selfhelp/article/How-does-PayPal-r...
    - tyingq 10y ago
      That is a significantly smaller subset than "all US customers and all US transactions". The point is that it's a fishing expedition.
      - criley2 10y ago
        Well sure, they don't need to fish in USD, but they do need to fish in bitcoin. It is what it is, but if I dealt in bitcoin over that period of time, and my returns didn't reflect it, I would be talking to tax attorneys and filing amended returns BEFORE the IRS letters started, not after.
derekp7 10y ago
How does it work if you sold a service for bitcoin, and the value of the bitcoin changed befor converting to cash? I would think that regular taxes (income) would be owed on the initial cash value, then capital gains tax would be owed on the float. Same as selling something in a foreign currency?
- tyingq 10y ago
  That's exactly the attraction coinbase had for many sellers (avoiding the volatility): https://www.coinbase.com/instant-exchange https://www.coinbase.com/instant-exchange
optimuspaul 10y ago
Well it is a currency exchange and does broker currency transactions. Seems like a brokerage to me.
chollida1 10y ago
> Many people used it more like Paypal, a conduit to make or receive payments for sales of goods or services. With the conversion of bitcoin to regular currency happening very quickly. No buy/hold/trade activity, etc. I'm glad you brought this up because it just strengthens my point. Paypal reports US account transactions to the IRS once they go over a certain size. https://www.paypal.com/us/webapps/mpp/irs6050w https://www.paypal.com/us/webapps/mpp/irs6050w
- tyingq 10y ago
  So does coinbase.

mhluongo 10y ago

The IRS isn't supposed to use these powers to go on "fishing expeditions", according to its own manual[1]. Requesting info on millions of users without particular suspicion is more broad than necessary. [1] - http://www.forbes.com/sites/kellyphillipserb/2016/11/21/irs-wants-court-authority-to-identify-bitcoin-users-transactions-at-coinbase/#7e2c86e40d11 http://www.forbes.com/sites/kellyphillipserb/2016/11/21/irs-...