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> it would be reasonable to only treat the eventual on-chain withdraw as a taxable event wouldn't that be an easy way to bypass taxes ? make all your transacti

• dboreham 4y ago
  How does that bypass taxes?
• meowkit 4y ago
  No. Its a settlement layer. I do 1000 streaming transactions on a channel. When the channel is closed (withdrawn back to the L1 chain, or settled - offchain is the wrong term here Lightning is an L2 "channel"), the transactions are summarized and you can tax that summary event. It's a linear sum of taxes. Of course there are scenarios that complicates things like variable sales tax rates based on transaction type/location/good, but that's an extended conversation. If you really want tax enforcement, governments should be looking to develop CBDC integration on the merchant side with bridge support for major crypto currencies. Given Intuit's iron grip on tax lobbying I don't have much hope for innovate tax schemes though.
  • lxgr 4y ago
    By the same logic, anything you do on a custodial exchange could never be a taxable event because it's never settled on-chain. I'd be extremely surprised if the IRS would share your view.