6 ms·

IRS gets permission to go after taxpayers who don't report crypto transactions

91 points by ilamont 4y ago

Proven 4y ago
Those 87K new IRS agents Biden is hiring will be busy. They said it was to catch tax-cheating billionaires. Oops. "Sorry, we lied". It's time for average Americans to benefit from personalized IRS service! "Claw back better."
- HWR_14 4y ago
  I'm fine with them warming up by catching tax-cheating millionaires. Seriously, pay your taxes.
  - ghufran_syed 4y ago
    Agree. Any thoughts about the possibility of abuse? https://en.wikipedia.org/wiki/List_of_allegations_of_misuse_of_the_Internal_Revenue_Service https://en.wikipedia.org/wiki/List_of_allegations_of_misuse_...
    - HWR_14 4y ago
      My thoughts are "abuse is bad" and also "there hasn't been enough history of abuse to really worry". There have been lots of allegations, but nothing documented since Nixon. At least nothing documented according to that wikipedia article. That said, I'm fine with punishing people who abuse the IRS.
- shakezula 4y ago
  The two are not mutually exclusive, and a stronger IRS is a good thing, no?
- mort96 4y ago
  I never understood this "They're gearing up the IRS to get regular working Americans!" thing. Most normal people pay their taxes, right? The people who are skirting around taxes are usually the ultra wealthy elite, right? Also, where's the 87k number coming from? The treasury department got funding which lets them hire about 87k new employees by 2031, but most of those aren't going to be IRS agents. The number also doesn't account for the number of employees you need to just keep the number of employees steady; people quit and get fired and retire.
  - deleted 4y ago
    [deleted]
  - cheald 4y ago
    The ultra wealthy elite are generally already under intense scrutiny and accordingly tend to pay an army of tax layers and accountants to ensure everything is buttoned up. Poorer people are significantly more likely to be audited: https://trac.syr.edu/tracirs/latest/679/ https://trac.syr.edu/tracirs/latest/679/ - I suspect that it's not that the IRS likes going after poorer people specifically, but that they're more successful in extracting money from people with less money to pay professionals to structure their finances and tax strategy or to defend themselves from an audit.
    - jeremysalwen 4y ago
      From the article linked you can see that the number of millionares audited has been steadily going down in recent years. The article explains it as: > A critical limitation in the IRS’s ability to audit millionaires is the availability of IRS revenue agents. Only this class of auditors, given sufficient training and experience, are qualified to examine complex tax returns – the types of returns typically filed by high-income individuals and large-scale businesses. > With severe budget constraints, IRS has tended to trade off the replacement of revenue agents with hiring more tax examiners. These certainly are paid less, but they are also less knowledgeable. While revenue agents used to outnumber tax examiners, this has slowly shifted over time. > Since the end of FY 2010, the number of IRS revenue agents has dropped by 41 percent. Initially, the number of tax examiners also fell although not at the same rate. By FY 2016, tax examiners began to outnumber revenue agents for the first time. During FY 2020 and FY 2021, major increases took place in the hiring of tax examiners. Thus, the number of tax examiners has regained all of their lost ground and were actually 1 percent higher than in 2010. See Figure 4 and Table 3.
- throwawaysleep 4y ago
  Billionaires pay for enough lawyers that they don’t tax cheat. They tax avoid. That’s a world of difference in a courtroom.
- gamblor956 4y ago
  The average American pays their taxes, because the average American's taxes are collected and paid for them by their employer. The groups that underreport the most are contractors, followed by small business owners, though this usually comes in the form of over-claiming expenses rather than understating revenue. Wealthy taxpayers pay accountants and lawyers to do tax planning on them. While some of them do cheat on their taxes, most of them simply find ways to owe less...though as someone who used to provide these services, between about $500k in annual income and around $10 million, there's a donut hole where the fees paid to tax advisors and the expenses incurred to reduce taxes (i.e., charitable donations, etc.) usually exceed the savings from reduced taxes unless the client is willing to maintain the planning structure for 5-7 years.
  - metadat 4y ago
    This ensures in a systematic way that such folks have great difficulty in further ascending to the higher financial ranks.
    - gamblor956 4y ago
      Boo f'ing hoo. If you're making $500k/year you're already in the top 0.5% of the world. Pity the poor rich people who aren't rich enough.
      - metadat 4y ago
        https://en.wikipedia.org/wiki/Crab_mentality https://en.wikipedia.org/wiki/Crab_mentality
  - deleted 4y ago
    [deleted]
- whywhywhydude 4y ago
  Even if the IRS goes after average Americans, what’s wrong with that? I am assuming most Americans pay taxes properly. Those who don’t should be discouraged.
mikewarot 4y ago
This was always one of 3 possible outcomes to bitcoin and cryptocurrencies in general. 1) Market collapse 2) Complete market shutdown by government action 3) De Facto Legitimization by being taxed and/or regulated in some fashion. I'm happy to pay taxes and help fund this country. I'm happy to have a way to route around things like Visa and Mastercard, and most borders.
- Test0129 4y ago
  > I'm happy to pay taxes and help fund this country. Whatever you do, don't look at how your tax dollars are actually allocated. I'm afraid you may be very disappointed.
  - mikewarot 4y ago
    Our government is flawed, sometimes it seems hopelessly so, but any replacement is bound to be worse.
  - SpikeDad 4y ago
    It's used for good and evil. Like everything else. I support organizations that are transparent and try to hold government agencies up to the light. Name anything that collects money and you'll find behaviors you don't like.
- RspecMAuthortah 4y ago
  A genuinely curious question to taxpayers who think they are funding the country: With 33T debts and deficit spending being the norm, why should I pay taxes? How much of what we pay as taxes actually go to fund "the country"? Part of me still wants to believe I as a responsible citizen should feel good that I pay my taxes but it increasingly feels to me a very small part of what we pay as taxes actually go to things that matter and ultimately deficit spending will be the only way by the time I would be entitled to enjoy some of the social security benefits to fund them. I live in a state that does not have income taxes.
  - sowbug 4y ago
elisharobinson 4y ago
Kinda sucks where the IRS is quicker to jump on the prospect to tax transactions ... Than the sec or fed is too offer solutions for protecting users from shit coins and fraud exchanges .. that's life I guess
rafaelero 4y ago
In my country, there is a monthly exemption of $6k over capital gains. That is, you only pay taxes if your gains are above 6k at the moment you transacted it. That allows us to use Bitcoin for minor purchases without having to face legal problems. It's stupid how laws in the US require even buying a coffee with Bitcoin to be audited.
- StanislavPetrov 4y ago
  This is a feature not a bug. The US government is making it as tedious and difficult as possible to comply with all of the byzantine regulations and complicated tax reporting that go along with using crypto.
  - ETH_start 4y ago
    Generally using the state's apparatus of coercion (the courts, police and prisons that compel compliance with state edicts) to prevent people from partaking in an entirely voluntary interaction is considered a bad thing, i.e. a bug, but I guess this is the edgy totalitarian-esque anti-crypto take.
Kon-Peki 4y ago
They are asking about a single service at a single bank… How much you wanna bet that they’re following up on a whistleblower tip? > Specifically, the IRS summons seeks information about customers of SFOX, a cryptocurrency prime broker, who used banking services that M.Y. Safra Bank offered to SFOX customers engaged in cryptocurrency transactions

91 points by ilamont 4y ago

Those 87K new IRS agents Biden is hiring will be busy. They said it was to catch tax-cheating billionaires. Oops. "Sorry, we lied". It's time for average Americans to benefit from personalized IRS service! "Claw back better."

HWR_14 4y ago
I'm fine with them warming up by catching tax-cheating millionaires. Seriously, pay your taxes.
- ghufran_syed 4y ago
  Agree. Any thoughts about the possibility of abuse? https://en.wikipedia.org/wiki/List_of_allegations_of_misuse_of_the_Internal_Revenue_Service https://en.wikipedia.org/wiki/List_of_allegations_of_misuse_...
  - HWR_14 4y ago
    My thoughts are "abuse is bad" and also "there hasn't been enough history of abuse to really worry". There have been lots of allegations, but nothing documented since Nixon. At least nothing documented according to that wikipedia article. That said, I'm fine with punishing people who abuse the IRS.
shakezula 4y ago
The two are not mutually exclusive, and a stronger IRS is a good thing, no?
mort96 4y ago
I never understood this "They're gearing up the IRS to get regular working Americans!" thing. Most normal people pay their taxes, right? The people who are skirting around taxes are usually the ultra wealthy elite, right? Also, where's the 87k number coming from? The treasury department got funding which lets them hire about 87k new employees by 2031, but most of those aren't going to be IRS agents. The number also doesn't account for the number of employees you need to just keep the number of employees steady; people quit and get fired and retire.
- deleted 4y ago
  [deleted]
- cheald 4y ago
  The ultra wealthy elite are generally already under intense scrutiny and accordingly tend to pay an army of tax layers and accountants to ensure everything is buttoned up. Poorer people are significantly more likely to be audited: https://trac.syr.edu/tracirs/latest/679/ https://trac.syr.edu/tracirs/latest/679/ - I suspect that it's not that the IRS likes going after poorer people specifically, but that they're more successful in extracting money from people with less money to pay professionals to structure their finances and tax strategy or to defend themselves from an audit.
  - jeremysalwen 4y ago
    From the article linked you can see that the number of millionares audited has been steadily going down in recent years. The article explains it as: > A critical limitation in the IRS’s ability to audit millionaires is the availability of IRS revenue agents. Only this class of auditors, given sufficient training and experience, are qualified to examine complex tax returns – the types of returns typically filed by high-income individuals and large-scale businesses. > With severe budget constraints, IRS has tended to trade off the replacement of revenue agents with hiring more tax examiners. These certainly are paid less, but they are also less knowledgeable. While revenue agents used to outnumber tax examiners, this has slowly shifted over time. > Since the end of FY 2010, the number of IRS revenue agents has dropped by 41 percent. Initially, the number of tax examiners also fell although not at the same rate. By FY 2016, tax examiners began to outnumber revenue agents for the first time. During FY 2020 and FY 2021, major increases took place in the hiring of tax examiners. Thus, the number of tax examiners has regained all of their lost ground and were actually 1 percent higher than in 2010. See Figure 4 and Table 3.
throwawaysleep 4y ago
Billionaires pay for enough lawyers that they don’t tax cheat. They tax avoid. That’s a world of difference in a courtroom.
gamblor956 4y ago
The average American pays their taxes, because the average American's taxes are collected and paid for them by their employer. The groups that underreport the most are contractors, followed by small business owners, though this usually comes in the form of over-claiming expenses rather than understating revenue. Wealthy taxpayers pay accountants and lawyers to do tax planning on them. While some of them do cheat on their taxes, most of them simply find ways to owe less...though as someone who used to provide these services, between about $500k in annual income and around $10 million, there's a donut hole where the fees paid to tax advisors and the expenses incurred to reduce taxes (i.e., charitable donations, etc.) usually exceed the savings from reduced taxes unless the client is willing to maintain the planning structure for 5-7 years.
- metadat 4y ago
  This ensures in a systematic way that such folks have great difficulty in further ascending to the higher financial ranks.
  - gamblor956 4y ago
    Boo f'ing hoo. If you're making $500k/year you're already in the top 0.5% of the world. Pity the poor rich people who aren't rich enough.
    - metadat 4y ago
      https://en.wikipedia.org/wiki/Crab_mentality https://en.wikipedia.org/wiki/Crab_mentality
- deleted 4y ago
  [deleted]
whywhywhydude 4y ago
Even if the IRS goes after average Americans, what’s wrong with that? I am assuming most Americans pay taxes properly. Those who don’t should be discouraged.

mikewarot 4y ago

This was always one of 3 possible outcomes to bitcoin and cryptocurrencies in general. 1) Market collapse 2) Complete market shutdown by government action 3) De Facto Legitimization by being taxed and/or regulated in some fashion. I'm happy to pay taxes and help fund this country. I'm happy to have a way to route around things like Visa and Mastercard, and most borders.

Test0129 4y ago
> I'm happy to pay taxes and help fund this country. Whatever you do, don't look at how your tax dollars are actually allocated. I'm afraid you may be very disappointed.
- mikewarot 4y ago
  Our government is flawed, sometimes it seems hopelessly so, but any replacement is bound to be worse.
- SpikeDad 4y ago
  It's used for good and evil. Like everything else. I support organizations that are transparent and try to hold government agencies up to the light. Name anything that collects money and you'll find behaviors you don't like.
RspecMAuthortah 4y ago
A genuinely curious question to taxpayers who think they are funding the country: With 33T debts and deficit spending being the norm, why should I pay taxes? How much of what we pay as taxes actually go to fund "the country"? Part of me still wants to believe I as a responsible citizen should feel good that I pay my taxes but it increasingly feels to me a very small part of what we pay as taxes actually go to things that matter and ultimately deficit spending will be the only way by the time I would be entitled to enjoy some of the social security benefits to fund them. I live in a state that does not have income taxes.
- sowbug 4y ago

elisharobinson 4y ago

Kinda sucks where the IRS is quicker to jump on the prospect to tax transactions ... Than the sec or fed is too offer solutions for protecting users from shit coins and fraud exchanges .. that's life I guess

rafaelero 4y ago

In my country, there is a monthly exemption of $6k over capital gains. That is, you only pay taxes if your gains are above 6k at the moment you transacted it. That allows us to use Bitcoin for minor purchases without having to face legal problems. It's stupid how laws in the US require even buying a coffee with Bitcoin to be audited.

StanislavPetrov 4y ago
This is a feature not a bug. The US government is making it as tedious and difficult as possible to comply with all of the byzantine regulations and complicated tax reporting that go along with using crypto.
- ETH_start 4y ago
  Generally using the state's apparatus of coercion (the courts, police and prisons that compel compliance with state edicts) to prevent people from partaking in an entirely voluntary interaction is considered a bad thing, i.e. a bug, but I guess this is the edgy totalitarian-esque anti-crypto take.

Kon-Peki 4y ago

They are asking about a single service at a single bank… How much you wanna bet that they’re following up on a whistleblower tip? > Specifically, the IRS summons seeks information about customers of SFOX, a cryptocurrency prime broker, who used banking services that M.Y. Safra Bank offered to SFOX customers engaged in cryptocurrency transactions