Simon Black reports IRS dreaming up new ways to tax BTC holders. On the one hand, the government denies BTC is a currency. On the other, they are trying to tax them. Not that any of us are suprised that the government is greedy or hypocritical.
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March 26, 2014
Sovereign Valley Farm, Chile
Well the IRS has certainly had a busy week.
1) Yesterday, the service released brand new rules pertaining to the taxation of Bitcoin.
And particularly for anyone who was an early adopter of the digital currency, the new tax rules are a major blow.
In short, the Treasury Department has chosen to tax Bitcoin as ‘property’ rather than as a currency.
This means that all those ‘Bitcoin millionaires’ out there who traded the Bitcoins they purchased for $0.01 for a shiny new Maserati will actually owe beaucoup bucks in back taxes.
More importantly, though, I think these rules set a rather dangerous precedent for gold.
2) Last week, the Criminal Investigative Division of the IRS released its annual report, highlighting all sorts of lovely statistics about how many people they put behind bars.
To be fair, there are definitely some lowlifes out there. Corrupt Congressmen and thieving banksters were all nailed to the wall by the CID last year.
Unfortunately they only get it right about half the time, according to their own statistics.
And the report shows a rather disturbing trend– they ‘seized’ 1.7 million gigabytes of data last year from individuals under investigation, more than double the volume of data seized in 2012.
But since almost half of these people are innocent, you can just imagine how much these investigation turn people’s lives upside down.
The CID report is a perfect example of the ‘multiple flags’ strategy that I advocate.
If you use a cloud service like Google Drive or Dropbox, for example, you are making it incredibly easy for the government to freeze you out of your digital assets, even if you’ve done nothing wrong.
By shifting your assets to a similar service based overseas, especially one that’s encrypted, you can save yourself this risk.
And best of all, it costs you absolutely nothing.