7 ms·

They are creating new techniques to tackle people potentially avoiding paying taxes on crytpo. By and large, this is not going to yield a ton of money as its li

They are creating new techniques to tackle people potentially avoiding paying taxes on crytpo. By and large, this is not going to yield a ton of money as its likely small traders, just trading and hoping to avoid paying on what are likely small to no profits. There are obviously going to be exceptions. They could instead just open up the Panama papers and target people and companies hiding billions. The issue is that this would then target those with money and power something the IRS appears loath to do. So instead the rich continue to pay a far lower proportion of taxes than they actually owe and the poor and middle class get hammered. The IRS already openly admits to not auditing the rich as its too complicated and to instead going after the less wealthy. No wonder the rich get richer...

JumpCrisscross 7y ago
> this is not going to yield a ton of money as its likely small traders Thanks to said tax evaders keeping a public record of their evasion (and for those who used tumblers, money laundering), the investigative costs are also lower. (We also have no evidence that these are small fry.) > they could instead just open up the Panama papers and target people and companies hiding billions One, the IRS doesn't control the release of the Panama papers. That's the ICIJ, the consortium that collected and vetted the papers. Two, Americans have been charged [2]. These investigations are expensive and resource-consuming. Simply having an entity in Panama doesn't mean someone is evading American taxes. [2] https://www.icij.org/investigations/panama-papers/first-american-charged-with-panama-papers-crimes-appears-in-court/ https://www.icij.org/investigations/panama-papers/first-amer...
- rolltiide 7y ago
  > Simply having an entity in Panama doesn't mean someone is evading American taxes. Just like using a tumbler doesn’t mean the crime of money laundering is occurring, as that crime requires an illicit origin not the mere act of obfuscation
  - JumpCrisscross 7y ago
    > using a tumbler doesn’t mean the crime of money laundering is occurring, as that crime requires an illicit origin not the mere act of obfuscation Correct. But if someone (a) didn't pay taxes on cryptocurrency proceeds they (b) didn't declare after (c) using a tumbler, that's as pre-packaged a case as one gets.
    - 0xfffafaCrash 7y ago
      Using bitcoin to purchase goods and services would be a taxable event, but is there really a clear case that using a tumbler is a taxable event? On what grounds?
      - ska 7y ago
        I think their arguments is you went say eth->btc and then through a tumbler, they would be able to charge you for tax avoidance on the eth->btc (assuming you didn't declare this and pay the tax) and then money laundering on the tumbler because it was meant to obfuscate that.
    - nokcha 7y ago
      There are legitimate reasons for wanting privacy/anonymity. Not everyone who uses a tumbler does so to evade taxes or launder money.
      - RandomBacon 7y ago
        I think it would be better for plausible deniability to just use a coin that has default privacy built-in. That way no one can point to the fact that person went out of their way and spent money (transaction fees) to attempt a measure of privacy.
    - rolltiide 7y ago
      Read a couple of tax court rulings, IRS embarrasses itself all the time on overzealous stretches. With non-reporting the IRS doesn't know how a taxpayer is categorizing a transaction. They wouldn't know if a transfer was a payment for a good/service with a capital gain or less required, or if a transfer was collateralizing debt to a third party that manages their collateral however they want which would not be a tax event, for example.
kkotak 7y ago
Humphreys County, Mississipp is one of the poorest and the most audited county in the US - https://www.marketplace.org/2019/04/15/study-where-irs-audits-more-and-less/ https://www.marketplace.org/2019/04/15/study-where-irs-audit...
- wonderwonder 7y ago
  Also ~75% black, but I'm sure that does not factor into the IRS' decisions...
  - jandrese 7y ago
    It seems to be mostly targeting the poor, in particular the Earned Income Tax Credit, because Republicans hate it and constantly pressure the IRS to target people who use it.
    - Koremat6666 7y ago
      If this true ? Can politicians target taxpayers based on what perfectly legal activities they do ? For example can Trump ask IRS to target say H1B employees ?
      - MiroF 7y ago
        The IRS publicly says that it audits poorer taxpayers at a higher rate because they require less manpower to audit. https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor https://www.propublica.org/article/irs-sorry-but-its-just-ea...
        jandrese 7y ago
        Sure it's easier, but it seems like the return on investment must be lousy. Is it really easier to audit 1 million people who end up owing an average of $100, or 10 people who end up owing $20 million?
SkyBelow 7y ago
>The issue is that this would then target those with money and power something the IRS appears loath to do. Ability to fight back makes one a less desirable target. We need to equalize access to courts so that wealth is not a factor.
- kevin_thibedeau 7y ago
  The government shouldn't be picking who to prosecute based on ease of conviction. Wealthy criminals are just as guilty as poor ones.
  - hanniabu 7y ago
    Well it seems in the US that just being poor is a crime
  - SkyBelow 7y ago
    If you could catch 10 child abusers or 1 child abuser within the next 2 months with your given resources, which would you choose? We need to make it so that catching any of the 11 takes equal amounts of work, so when they pick the 10 of 11 to go after they rank it by severity of crime or other more reasonable factors than the criminal's wealth.
    - HammockWarrior 7y ago
      A better analogy would be: would you rather catch 10 thieves who stole $10 or one theif who stole $1,000,000?
      - SkyBelow 7y ago
        If the metric employees (police, prosecutors, etc.) are judged by is how many criminals are caught, does the answer change?
        HammockWarrior 7y ago
tptacek 7y ago
Your argument appears to be that lighter tax evasion shouldn't be prosecuted as long as there are heavy tax evaders that haven't been prosecuted. There are no doubt people right now plotting highly technical 15-person bank vault heists, but I absolutely expect the police to investigate a B&E of my house.
- uncoder0 7y ago
  In my experience the police don't investigate B&E's into people's homes that often or with any vigor.
  - tptacek 7y ago
    That has not been my experience.
  - ska 7y ago
    That probably depends a lot on whose house and where it is.
    - uncoder0 7y ago
      Twice for me. Both in lower rent apartment row houses in college in different locations. Tons of electronics stolen and I had the S/N for 80% of them and one firearm, cops didn't seem to care. On one instance I gave them the likely culprit. Which was someone I had known from the neighborhood that I saw looking in windows when I drove left the afternoon I got robbed, didn't think too much of it at the time; just thought he was trying hang out with friend and was trying to see if they were home.
- wonderwonder 7y ago
  My argument is that the rich have been evading paying taxes for decades and the IRS acknowledges this. They also acknowledge that they actively target the poor due to auditing the rich being difficult. I am sure politics and lobbying adds to that difficulty. The current system is geared towards keeping the rich and poor where they are. I find it interesting that the IRS devotes resources towards targeting a new wealth source available to the poor while not dedicating those same resources towards auditing the wealthy. (I am in no way a crypto evangelist). One could argue that they are going after low hanging fruit, and I would not disagree but I would also argue that they are actively choosing to not target the rich with their limited resources. I think you analogy is flawed, I would instead compare this case to the police hanging out in poor neighborhoods targeting house parties vs doing the same in rich neighborhoods as they may need to go the extra step of getting a gate code to the rich neighborhoods.
CPLX 7y ago
Though I agree with your sentiment my understanding is that the Panama Papers had very little for the IRS to work with because the law firm in question, who were not interested in fighting the US government, actively avoided having US citizens as clients.
fredgrott 7y ago
ahem, its resources...a billionaire can afford a team of highly skilled trial lawyers whereas gov orgs tend to have trouble with this...the main reason why Trump did not testify in the special prosecutor probe was that the gov team did not have an adequate amount of experienced trial lawyers on staff to take it to the Supreme court. That is not the only example... financial crisis of 2008 and why no bank execs did time...same reason DOJ lacking exp trial lawyers on staff

JumpCrisscross 7y ago

> this is not going to yield a ton of money as its likely small traders Thanks to said tax evaders keeping a public record of their evasion (and for those who used tumblers, money laundering), the investigative costs are also lower. (We also have no evidence that these are small fry.) > they could instead just open up the Panama papers and target people and companies hiding billions One, the IRS doesn't control the release of the Panama papers. That's the ICIJ, the consortium that collected and vetted the papers. Two, Americans have been charged [2]. These investigations are expensive and resource-consuming. Simply having an entity in Panama doesn't mean someone is evading American taxes. [2] https://www.icij.org/investigations/panama-papers/first-american-charged-with-panama-papers-crimes-appears-in-court/ https://www.icij.org/investigations/panama-papers/first-amer...

rolltiide 7y ago
> Simply having an entity in Panama doesn't mean someone is evading American taxes. Just like using a tumbler doesn’t mean the crime of money laundering is occurring, as that crime requires an illicit origin not the mere act of obfuscation
- JumpCrisscross 7y ago
  > using a tumbler doesn’t mean the crime of money laundering is occurring, as that crime requires an illicit origin not the mere act of obfuscation Correct. But if someone (a) didn't pay taxes on cryptocurrency proceeds they (b) didn't declare after (c) using a tumbler, that's as pre-packaged a case as one gets.
  - 0xfffafaCrash 7y ago
    Using bitcoin to purchase goods and services would be a taxable event, but is there really a clear case that using a tumbler is a taxable event? On what grounds?
    - ska 7y ago
      I think their arguments is you went say eth->btc and then through a tumbler, they would be able to charge you for tax avoidance on the eth->btc (assuming you didn't declare this and pay the tax) and then money laundering on the tumbler because it was meant to obfuscate that.
  - nokcha 7y ago
    There are legitimate reasons for wanting privacy/anonymity. Not everyone who uses a tumbler does so to evade taxes or launder money.
    - RandomBacon 7y ago
      I think it would be better for plausible deniability to just use a coin that has default privacy built-in. That way no one can point to the fact that person went out of their way and spent money (transaction fees) to attempt a measure of privacy.
  - rolltiide 7y ago
    Read a couple of tax court rulings, IRS embarrasses itself all the time on overzealous stretches. With non-reporting the IRS doesn't know how a taxpayer is categorizing a transaction. They wouldn't know if a transfer was a payment for a good/service with a capital gain or less required, or if a transfer was collateralizing debt to a third party that manages their collateral however they want which would not be a tax event, for example.

kkotak 7y ago

Humphreys County, Mississipp is one of the poorest and the most audited county in the US - https://www.marketplace.org/2019/04/15/study-where-irs-audits-more-and-less/ https://www.marketplace.org/2019/04/15/study-where-irs-audit...

wonderwonder 7y ago
Also ~75% black, but I'm sure that does not factor into the IRS' decisions...
- jandrese 7y ago
  It seems to be mostly targeting the poor, in particular the Earned Income Tax Credit, because Republicans hate it and constantly pressure the IRS to target people who use it.
  - Koremat6666 7y ago
    If this true ? Can politicians target taxpayers based on what perfectly legal activities they do ? For example can Trump ask IRS to target say H1B employees ?
    - MiroF 7y ago
      The IRS publicly says that it audits poorer taxpayers at a higher rate because they require less manpower to audit. https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor https://www.propublica.org/article/irs-sorry-but-its-just-ea...
      - jandrese 7y ago
        Sure it's easier, but it seems like the return on investment must be lousy. Is it really easier to audit 1 million people who end up owing an average of $100, or 10 people who end up owing $20 million?

SkyBelow 7y ago

>The issue is that this would then target those with money and power something the IRS appears loath to do. Ability to fight back makes one a less desirable target. We need to equalize access to courts so that wealth is not a factor.

kevin_thibedeau 7y ago
The government shouldn't be picking who to prosecute based on ease of conviction. Wealthy criminals are just as guilty as poor ones.
- hanniabu 7y ago
  Well it seems in the US that just being poor is a crime
- SkyBelow 7y ago
  If you could catch 10 child abusers or 1 child abuser within the next 2 months with your given resources, which would you choose? We need to make it so that catching any of the 11 takes equal amounts of work, so when they pick the 10 of 11 to go after they rank it by severity of crime or other more reasonable factors than the criminal's wealth.
  - HammockWarrior 7y ago
    A better analogy would be: would you rather catch 10 thieves who stole $10 or one theif who stole $1,000,000?
    - SkyBelow 7y ago
      If the metric employees (police, prosecutors, etc.) are judged by is how many criminals are caught, does the answer change?
      - HammockWarrior 7y ago

tptacek 7y ago

Your argument appears to be that lighter tax evasion shouldn't be prosecuted as long as there are heavy tax evaders that haven't been prosecuted. There are no doubt people right now plotting highly technical 15-person bank vault heists, but I absolutely expect the police to investigate a B&E of my house.

uncoder0 7y ago
In my experience the police don't investigate B&E's into people's homes that often or with any vigor.
- tptacek 7y ago
  That has not been my experience.
- ska 7y ago
  That probably depends a lot on whose house and where it is.
  - uncoder0 7y ago
    Twice for me. Both in lower rent apartment row houses in college in different locations. Tons of electronics stolen and I had the S/N for 80% of them and one firearm, cops didn't seem to care. On one instance I gave them the likely culprit. Which was someone I had known from the neighborhood that I saw looking in windows when I drove left the afternoon I got robbed, didn't think too much of it at the time; just thought he was trying hang out with friend and was trying to see if they were home.
wonderwonder 7y ago
My argument is that the rich have been evading paying taxes for decades and the IRS acknowledges this. They also acknowledge that they actively target the poor due to auditing the rich being difficult. I am sure politics and lobbying adds to that difficulty. The current system is geared towards keeping the rich and poor where they are. I find it interesting that the IRS devotes resources towards targeting a new wealth source available to the poor while not dedicating those same resources towards auditing the wealthy. (I am in no way a crypto evangelist). One could argue that they are going after low hanging fruit, and I would not disagree but I would also argue that they are actively choosing to not target the rich with their limited resources. I think you analogy is flawed, I would instead compare this case to the police hanging out in poor neighborhoods targeting house parties vs doing the same in rich neighborhoods as they may need to go the extra step of getting a gate code to the rich neighborhoods.

CPLX 7y ago

Though I agree with your sentiment my understanding is that the Panama Papers had very little for the IRS to work with because the law firm in question, who were not interested in fighting the US government, actively avoided having US citizens as clients.

fredgrott 7y ago

ahem, its resources...a billionaire can afford a team of highly skilled trial lawyers whereas gov orgs tend to have trouble with this...the main reason why Trump did not testify in the special prosecutor probe was that the gov team did not have an adequate amount of experienced trial lawyers on staff to take it to the Supreme court. That is not the only example... financial crisis of 2008 and why no bank execs did time...same reason DOJ lacking exp trial lawyers on staff