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There hasn't been any problem enforcing it PRECISELY because cryptocurrency technology didn't previously exist.

by drcode 9y ago

openasocket 9y ago
I don't think cryptocurrency helps. When we're talking about regulation, we're talking about tax and tax evasion, right? They don't need to be able to trace the source and destination of all financial transactions. They just need to notice the guy who's reporting to the IRS he's working at minimum wage is driving around in a brand new sports car. Which is the sort of thing that will show up during a random audit. So the problem with using cryptocurrency for unregulated or illicit things is the same for cash: you need to launder your money. So you make a small business that sells stuff using a cryptocurrency, and inflate the profits with your dirty cryptocurrency. But then during an audit you have to show your reported income is legitimate, with proper sales receipts and such. And then we've entered the exciting, fast-paced world of forensic accounting! It's all pretty much the same story as a cash-based business.
- drcode 9y ago
  > we're talking about tax and tax evasion, right? I was talking about unregulated securities offerings, where I'd say cryptocurrency DOES help. However, I see OP invoked the IRS for some reason- I agree cryptocurrency doesn't help much for tax evasion.
  - tudorconstantin 9y ago
    I'd say it can help. You can have 10 million USD in crypto and live a normal life: pay rent, drive a usual car, etc. Nobody will notice you, not even the IRS. If you want to move your funds in another country, you simply have to move yourself and spend them there. You can't do that with fiat.
    - openasocket 9y ago
      $10M in unreported income, that you're actually spending? That's tax evasion. It's literally the IRS's job to catch that behavior. And at the end of the day if you're spending more than what you've reported as income to the IRS you will be caught.
    - drcode 9y ago
      Right, you could live a middle class life for 20 years and then retire in Nicaragua or something with 10 million USD... ...or you could just pay 20% (or whatever) cap gains taxes and immediately use your 8 million USD in the US- That seems like the preferable option.

There hasn't been any problem enforcing it PRECISELY because cryptocurrency technology didn't previously exist.

by drcode 9y ago

There hasn't been any problem enforcing it PRECISELY because cryptocurrency technology didn't previously exist.

I don't think cryptocurrency helps. When we're talking about regulation, we're talking about tax and tax evasion, right? They don't need to be able to trace the source and destination of all financial transactions. They just need to notice the guy who's reporting to the IRS he's working at minimum wage is driving around in a brand new sports car. Which is the sort of thing that will show up during a random audit. So the problem with using cryptocurrency for unregulated or illicit things is the same for cash: you need to launder your money. So you make a small business that sells stuff using a cryptocurrency, and inflate the profits with your dirty cryptocurrency. But then during an audit you have to show your reported income is legitimate, with proper sales receipts and such. And then we've entered the exciting, fast-paced world of forensic accounting! It's all pretty much the same story as a cash-based business.

drcode 9y ago
> we're talking about tax and tax evasion, right? I was talking about unregulated securities offerings, where I'd say cryptocurrency DOES help. However, I see OP invoked the IRS for some reason- I agree cryptocurrency doesn't help much for tax evasion.
- tudorconstantin 9y ago
  I'd say it can help. You can have 10 million USD in crypto and live a normal life: pay rent, drive a usual car, etc. Nobody will notice you, not even the IRS. If you want to move your funds in another country, you simply have to move yourself and spend them there. You can't do that with fiat.
  - openasocket 9y ago
    $10M in unreported income, that you're actually spending? That's tax evasion. It's literally the IRS's job to catch that behavior. And at the end of the day if you're spending more than what you've reported as income to the IRS you will be caught.
  - drcode 9y ago
    Right, you could live a middle class life for 20 years and then retire in Nicaragua or something with 10 million USD... ...or you could just pay 20% (or whatever) cap gains taxes and immediately use your 8 million USD in the US- That seems like the preferable option.