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> 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 occ

> 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.

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.