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I mean, you can already use decentralized exchanges where you won't even have to give your name. I think for most people that are not doing anything illegal, th

I mean, you can already use decentralized exchanges where you won't even have to give your name. I think for most people that are not doing anything illegal, there's no point in trying to evade taxes. The way I look at it, you either made lots of profits, so you'll have to explain where you got the money from anyways. Or you didn't make a lot of profit, why hide it? There won't be that much tax anyways.

ObserverNeutral 5y ago
> so you'll have to explain where you got the money from anyways Explain to whom?
- rawtxapp 5y ago
  To your bank? Presumably if you made a lot of money, you'll be buying some houses and maybe some cars or creating your own businesses or something. If you transfer large amounts, it might get frozen if you can't explain the origin (kyc/aml).
  - deleted 5y ago
    [deleted]
- happytoexplain 5y ago
  Assuming you're being facetious, I have always wondered where the line is. If I discover ten thousand dollars in cash in a hole in the ground and deposit it, will the IRS notice? Will the bank require some kind of information? What about if it's a hundred thousand?
  - bluedino 5y ago
    The bank will have to report it to the IRS. They will cross-reference it with your taxes. They will also come talk to you if you have a pattern of doing it regularly. But you will probably not have an issue with it.
  - dsr_ 5y ago
    The bank will fill out a form about "structuring deposits" for any transaction around $10K. They will also report transactions in general over $10K. https://en.wikipedia.org/wiki/Structuring https://en.wikipedia.org/wiki/Structuring
  - je_bailey 5y ago
    Yes, When large amounts of money are deposited into an account there is an automatic notice sent to the government. A One time event shouldn't be an issue however if you have multiple events of large deposits then it's going to trigger algorithms and the government is going to start asking where you got the money from and they'll perform an audit. If you attempt to bypass the system they have systems in place to detect that and will perform an audit. Just pay your taxes
  - deleted 5y ago
    [deleted]
  - ObserverNeutral 5y ago
    > Will the bank require some kind of information Crypto doesn't go through the banking system. Miners for example can spend the mined crypto and for all practical purposes nobody will ever know.
  - Supermancho 5y ago
    Try depositing 50k at any US bank. Instant paperwork. Try depositing 10k. No questions asked.
- TigeriusKirk 5y ago
  Coinbase, for one. There's a whole process under the KYC/AML regulations if you want to deposit large amounts of crypto with a legit exchange.
jhgb 5y ago
I'm not from the US but my understanding is that even if you're doing illegal stuff there's still no point in trying to evade taxes, as IRS is not allowed to notify anyone about where you got the money from anyway. "Illegal activities: Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8, or on Schedule C (Form 1040) if from your self-employment activity" They thought of everything!
- Pfhreak 5y ago
  This clause came from the era of Al Capone, who famously boasted, "They can't collect legal taxes from illegal money." (Which was true at the time.) They added this clause and then ended up catching Capone for tax evasion. https://www.forbes.com/sites/kellyphillipserb/2020/10/17/al-capone-convicted-on-this-day-in-1931-after-boasting-they-cant-collect-legal-taxes-from-illegal-money/?sh=32d97b381435 https://www.forbes.com/sites/kellyphillipserb/2020/10/17/al-...
- ocdtrekkie 5y ago
  I think the point of this is less that the IRS won't report it to someone else, but that it adds tax evasion as a reason a criminal can be pursued. You are probably thinking it's like where contact tracers or census workers or whatever aren't supposed to report illegal immigrants because it's more important that they get accurate info than report people to ICE. I don't think that's the case with the IRS, they're probably more than happy to let other agencies know about your illegal activity.
  - jhgb 5y ago
    I got it from here (https://money.cnn.com/2013/02/28/news/economy/illegal-income-tax/index.html https://money.cnn.com/2013/02/28/news/economy/illegal-income...): "If you tell the IRS you made $1 million from stealing money or dealing drugs, does the agency tip off the cops? Legally, it can't, unless a law-enforcement agency gets a court order granting it access to a specific taxpayer's return. The IRS isn't supposed to proactively alert other agencies about misdeeds unless terrorism is involved. In that case, it still needs a court order to disclose anything, but the IRS can initiate the legal process on its own." I have no idea if it is still valid or not.

ObserverNeutral 5y ago

> so you'll have to explain where you got the money from anyways Explain to whom?

rawtxapp 5y ago
To your bank? Presumably if you made a lot of money, you'll be buying some houses and maybe some cars or creating your own businesses or something. If you transfer large amounts, it might get frozen if you can't explain the origin (kyc/aml).
- deleted 5y ago
  [deleted]
happytoexplain 5y ago
Assuming you're being facetious, I have always wondered where the line is. If I discover ten thousand dollars in cash in a hole in the ground and deposit it, will the IRS notice? Will the bank require some kind of information? What about if it's a hundred thousand?
- bluedino 5y ago
  The bank will have to report it to the IRS. They will cross-reference it with your taxes. They will also come talk to you if you have a pattern of doing it regularly. But you will probably not have an issue with it.
- dsr_ 5y ago
  The bank will fill out a form about "structuring deposits" for any transaction around $10K. They will also report transactions in general over $10K. https://en.wikipedia.org/wiki/Structuring https://en.wikipedia.org/wiki/Structuring
- je_bailey 5y ago
  Yes, When large amounts of money are deposited into an account there is an automatic notice sent to the government. A One time event shouldn't be an issue however if you have multiple events of large deposits then it's going to trigger algorithms and the government is going to start asking where you got the money from and they'll perform an audit. If you attempt to bypass the system they have systems in place to detect that and will perform an audit. Just pay your taxes
- deleted 5y ago
  [deleted]
- ObserverNeutral 5y ago
  > Will the bank require some kind of information Crypto doesn't go through the banking system. Miners for example can spend the mined crypto and for all practical purposes nobody will ever know.
- Supermancho 5y ago
  Try depositing 50k at any US bank. Instant paperwork. Try depositing 10k. No questions asked.
TigeriusKirk 5y ago
Coinbase, for one. There's a whole process under the KYC/AML regulations if you want to deposit large amounts of crypto with a legit exchange.

jhgb 5y ago

I'm not from the US but my understanding is that even if you're doing illegal stuff there's still no point in trying to evade taxes, as IRS is not allowed to notify anyone about where you got the money from anyway. "Illegal activities: Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8, or on Schedule C (Form 1040) if from your self-employment activity" They thought of everything!

Pfhreak 5y ago
This clause came from the era of Al Capone, who famously boasted, "They can't collect legal taxes from illegal money." (Which was true at the time.) They added this clause and then ended up catching Capone for tax evasion. https://www.forbes.com/sites/kellyphillipserb/2020/10/17/al-capone-convicted-on-this-day-in-1931-after-boasting-they-cant-collect-legal-taxes-from-illegal-money/?sh=32d97b381435 https://www.forbes.com/sites/kellyphillipserb/2020/10/17/al-...
ocdtrekkie 5y ago
I think the point of this is less that the IRS won't report it to someone else, but that it adds tax evasion as a reason a criminal can be pursued. You are probably thinking it's like where contact tracers or census workers or whatever aren't supposed to report illegal immigrants because it's more important that they get accurate info than report people to ICE. I don't think that's the case with the IRS, they're probably more than happy to let other agencies know about your illegal activity.
- jhgb 5y ago
  I got it from here (https://money.cnn.com/2013/02/28/news/economy/illegal-income-tax/index.html https://money.cnn.com/2013/02/28/news/economy/illegal-income...): "If you tell the IRS you made $1 million from stealing money or dealing drugs, does the agency tip off the cops? Legally, it can't, unless a law-enforcement agency gets a court order granting it access to a specific taxpayer's return. The IRS isn't supposed to proactively alert other agencies about misdeeds unless terrorism is involved. In that case, it still needs a court order to disclose anything, but the IRS can initiate the legal process on its own." I have no idea if it is still valid or not.