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Every US taxpayer in Crypto should be aware of what’s unfolding

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US taxpayer in Crypto

IRS said it will issue guidance for crypto taxation this year.  “IRS knows what’s going on” said one of the popular IRS’s agents recently. Binance is restricting US residents from trading on its platform starting this September. Only last year, IRS was successful in issuing summons to Coinbase.  

A recently leaked IRS Cyber Crimes training document outlined how far IRS is ready to go to tackle the problem of ‘virtual currency trading’ and ‘transfer of wealth from fiat to bitcoin’.  

It doesn’t take a genius to sense that something is brewing on the tax and FinCEN front, at least in the US.

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Einstein is quoted to have talked about two certainties in life: death and taxes.   Not everyone believes that Governments have the right to tax.  

The percentage of these anarchists is higher in the crypto space. Some may have even gotten into crypto space to amass wealth without declaring anything.

We at CryptoTapas have been calling people to action to never hide anything.  If you don’t like to pay taxes, move to a country where there are no taxes and see how you like it there. 

Ominous signs of impending action are already in the air

US taxpayer in Crypto

IRS is now getting ready to send out 10,000 letters to individuals with virtual currency transactions.  

“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties,” said IRS Commissioner Chuck Rettig.

Gary Alford, the guy who helped solve Silk Road case said in a recent interview with Forbes that IRS was well aware of what was going on.  In his own words, “We’re usually behind the curve — history is made and then we react to it. But in this case, we are ahead of the curve. We were there on ground zero, and we were waiting for the rest of the world to catch up to what we already knew… We already are aware that there were cases to be made, we just didn’t know if we were at the point where we can bring it for criminal prosecution. We believe we are at that point now. If we had 12 jurors and told them someone made all their money in bitcoin, we believe that they would understand.”

Binance announced that it will stop serving US residents starting September of 2019. This may be a move to avoid US’s legal reach on the basis of Americans trading on its platform. We are not sure if this strategy will shield Binance from the US probes.

Disclosure, whether conservative or aggressive, is the way to go

US Taxpayer in Crypto

Before Trump’s Jobs Act made it clear that like-kind exchange treatment only applies to Real Estate properties and not others, some individuals have used like-kind exchange treatment with bitcoin and crypto transactions.  

Even then, the fact that these folks have gone to the lengths of enduring complexities of disclosing crypto under like-kind exchanges is a far better position than those who refused to disclose anything entirely.

While IRS is due to provide a detailed guidance in 2019, existing guidance from 2014 or even the aggressive like-kind exchange position before 2018 tax year were still grounds for good faith disclosure.

Affirmative guidance creates grounds for IRS to pursue tax evaders

IRS understands that without affirmative guidance they may face an uphill battle in tax courts to prove that not reporting or even reporting inadequately is a crime.

Once the guidance is in place, then the IRS will have all the ammunition it needs to go after those who are deluded to think they can outsmart the agency that brought down Capone.

However, IRS is not waiting until after the guidance is made available, they are already taking action (most probably based on the information they gathered from Coinbase subpoena).  

IRS has won in the court before, it will in future

As we reported earlier, IRS issued a summons to Coinbase to release its customers information.  This was when there was no concrete guidance on what defines evasion as it relates to crypto taxation.  

Now that they are gearing to issue that long eluded guidance, US residents better pay attention.

In some cases, US taxpayers who have not reported transactions that are otherwise reportable may have to go back to amend the tax returns.  You must consult a tax professional who specialises in the digital assets area.

Income tax is the least of your worries

US Taxpayer in Crypto

We issued a detailed guidance on FinCEN Form 114 disclosure last year.  We will update this guidance for 2019 toward the end of the year (another reason to subscribe) because it is, in our view, equally critical to disclose your foreign crypto exchange balances to the United States Treasury.  This requirement is in addition to your tax form disclosures, and continues year over year as long as you hold the crypto or any financial account in a non-US crypto institution or exchange.

 

Your digital wallets are exempt from the FinCEN Form 114 disclosures since you own the private keys and are not considered to be held in a foreign account.

Formation of special Task Force is likely

We speculate that the IRS will form a special task force comprising of law veterans, tax nerds and tech geeks to excavate crypto wealth no matter how deeply it is buried.  

In its training deck, IRS Cyber Crimes has alluded to how they will use the tools that could help them track the owners from back-tracking the wallet addresses to their IPs to the owners.  This will obviously need a concerted effort from the IRS, Blockchain and Crypto community and Cyber Crimes divisions.

Virtual Currency Task Force is not a bad name, but Digital Assets Task Force, or DAT Force, now that’s vogue

Blockchain’s open architecture may actually make this excavating easy for IRS, with the right resources in place.  

In the training deck, IRS Cyber Crimes laid out plans to use ‘Chainalysis’ to backtrack the ownership of bitcoin and other digital currency wallets.    

Again, these developments should only worry those who chose to bypass the law not those who have been diligent in their tax and legal affairs.

Script tightens, rattling will ensue

First the infamous IRS agent, Gary, comments on how IRS knows everything.  Then IRS goes out and gets the subpoena against US’s most popular crypto exchange, then the Cyber Crimes training deck talks about going to lengths to fish out the evaders, Trump joins in on the party calling out bitcoin while the Senate continues its grilling of Facebook Libra.  

The script of ‘anti-nation’ and ‘national security’ are slowly getting tagged to the bitcoin and crypto community.  This is not a good direction but one that we hope will take ‘measured’ turn to protect the citizens who are working with the law while unearthing those who are not.  

This balance is very hard to achieve and we have some of the most uninformed politicians in power who are calling bitcoin a ‘bigger threat to nation’.  

This is an unfortunate rhetoric that we hope the Government will quickly clarify and ensure the progress of this amazing technology with workable legal framework.  If US fails to achieve this harmony – other nations will take over the US’s position in the technology front.

Conclusion

Something is brewing around the world.  Governments are more aware of how blockchain wallets work, what DEx’s are and how the world of crypto trading works.  

Our recommendation continues to be that you stay compliant with country’s laws, not just tax but also financial account disclosure requirements, and stay clear of any nefarious ideas to evade taxes or to break the law.

Thank you for reading the article.

You may be interested:
IRS Cyber Crimes leaked training document

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

Read more about the author here.

 

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Crypto Roundup: All Your YouTube Influencers in One Place

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Crypto Roundup

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: Bitcoin Will Be OVER $20,000 By Christmas 2020! BIGGEST WEALTH SHIFT OF OUR LIFETIME! Cryptocurrency

Date: 19-Nov-20

  • World’s biggest wealth shift of our lifetime is happening right now and no mainstream media is talking about it, except CNBC.

  • Preston Pysh predicted on August 26th that: “Bitcoin should be reaching its all time high by Christmas.”

  • If you are looking to buy a dip, there may not be one.
  • Ricardo Salinas Pliego, a mexican billionaire, has just revealed that 10% of his liquid assets are into bitcoin.

Lark Davis

Video Title: STOCKS HIT NEW HIGHS! WILL COVID VACCINES LEAD TO MEGA PUMP IN 2021? [Are You Ready?]

Date: 19-Nov-2020

  • Stock markets and bitcoin pumps higher on the news of the second successful covid vaccine.
  • There could be more chances for the new stimulus. Means more inflation, more debt and simultaneously pumps stocks, gold and bitcoin.

Crypto Zombie

Video Title: BITCOIN $18.5k TOP!!?! DON’T BE FOOLED!! HODL FOMO BEGINS!!! $TRILLIONS FLOOD!!

Date: 18-Nov-2020

  • Overall sentiment of Bitcoin has changed drastically from ICO craze in 2017 to a time where people are FOMOing to own more bitcoin.

Ivan on tech 

Video Title: BIG WARNING TO ALL HODLERS!!!!!!!!! DO NOT GET REKT!!! BITCOIN $18,500 REJECTED – NOW WHAT?

Date: 18-Nov-2020

  • Ivan expects bitcoin to shoot past $20K resistance before end of this year, giving it 85% probability

Chico Crypto

Video Title: World’s Most Powerful Turn BULLISH on BITCOIN

Date: 19-Nov-2020

  • All those who hold big bags of Bitcoin will come out of the shadows to talk up the Bitcoin rally, a $20K bitcoin could be on the cards before the end of this year
  • Ethereum mining could act as a big catalyst for Ethereum’s price
  • Big companies like google could play a bigger role in mass adoption of crypto

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Lessons from the Veteran HODLERS to the Newbies!

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Lessons in Crypto

For all those who entered the crypto market after the 2017 bull run – here are few lessons from the HODLERS from the last bull run(s).

This is our attempt at making all you newbies aware of the mistakes veteran cryptoers did.

Let’s get started…

Don’t FOMO in to all the hype

FomoIt’s hard not to FOMO in crypto.  The trick is to make sure you don’t lose your shirt in crazy bets.  Always limit your bets to what you are comfortable losing.

The common ways you can become victim of FOMO are:

  • Following your favorite YouTuber without actually doing your own research on the project.
  • Investing into projects at the top.
  • Believing in promises of 100x or 1000x without any substance behind those claims.

HODLing far too long

Remember why you are into crypto – to make the money.

Never fall in love with your crypto, and HODL the tokens even when they are 10x and more.

Have a strategy to take your capital out before you become a HODLer.  

If you believe the project really has what it takes to go beyond 100x and more, just sell in instalments so as to not miss the ride.

One of the best ways to HODL is to take your capital in full and profit in tranches.

This rekt story will give you a right perspective of what it looks like, it’s one of many:

Don’t put all your eggs in one basket

Never go all in on one project. No matter how strong the project may look, even the projects with strong fundamentals don’t do well sometimes. 

And, you will be kicking yourself watching other projects go up and your portfolio just doesn’t seem to make a move.

And don’t over do it and have a portfolio with over 100 projects either. It is very difficult not to have invested in more than 15 projects but anything less than 20 is a good way to go, in our opinion. 

Put aside the share of Profits for Taxes.

One way you can get a good night’s sleep is by paying taxes. 

Always keep a habit of putting aside a % of your profits in USDT or other stable coins, as a reserve to take advantage of market volatility and also to meet your tax obligations. 

Exchanges are more evil during bull run

Foreign ExchangesDon’t trust exchanges. Yes we already know that, but they play more games during bullrun, some intentional and some technical. 

Many exchanges tend to go under maintenance when the prices shoot up too high too soon (Coinbase?), and you can’t sell. 

And the shady exchanges scam out before you know.

Regulators seem interested when the market cap of these projects goes through the roof, which then adds FUD around the project crashing the prices.  

Exchange may freeze funds pending investigations when such issues arise.

Take for example OKEx. Users are unable to withdraw their assets from the exchange for almost a month now, not certain if they ever will, and all that started with the legal dispute.

Never fall for Arbitrage gains

Arbitrage is when you buy in one exchange at a lower rate and sell on the other for a higher rate to take some profits. 

Some shady exchanges show a lot higher prices than the other genuine exchanges and when you deposit your assets to sell at those prices there won’t be actual volume to execute the trade. You may be stuck with either a high fee for withdrawal or other funky rules to take your own money out. 

Remember, there is no free Giveaway

Free CryptoScammers rise with the rising market.  

When the crypto market buzzes with all time highs – scammers cash in big time on newbies.

The most lucrative scam in crypto is ‘Free Giveaway’. Whether it be through YouYube ads or discussion groups and wherever they can get your attention.  Read this article on various sophisticated scams that are being deployed.

We hope these lessons help you through your trades and crypto life.  Stay safe and always DYOR.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

Continue Reading

CryptoSpace

Crypto Roundup: All Your YouTube Influencers in One Place

Published

on

crypto news

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: The United States Just Brought Bitcoin into the National Conversation!! | Cryptocurrency in 2021

Date: 16-Nov-20

  • Former National Treasurer and the new US Senator Elected, Cynthia Lummis, said Bitcoin fits the bill as a good store of value as it is finite and limited, unlike the inflationary fiat currency.

  • Grayscale adds over 7000 more bitcoin in just the last 24 hours.
  • Just over 16% ETH staked for ETH 2.0 launch on Dec 2 2020.
  • Bitcoin Cash hard fork takes place tomorrow.

Crypto Zombie

Video Title: WARNING!!! BITCOIN 2017 BEAR FRACTAL RETURNS!!! BTC WORST CASE SCENARIO…

Date: 14-Nov-2020

  • Institutional money starts flowing into bitcoin.

  • Paypal goes live with its crypto trading platform for eligible customers. They have also raised the buying limits from the initially set $10,000 to $20,000 per week.
  • DIA, an DeFI Oracle provider, integrates with Polkadot.

Ivan on tech 

Video Title: BITCOIN WILL DO SOMETHING INSANE THIS WEEK!!!! -30% DUMP AHEAD vs $20,000 PARTY – Programmer

Date: 16-Nov-2020

  • Bitcoin could make a big move this week, either hit 20K or we may see a 20% to 30% drop
  • Chainlink partners with Etherisc to deliver agricultural insurance in Kenya.

Ellio Trades

Video Title: UNLOCKING $100 TRILLION? This low cap gem seeks to bridge CeFi and DeFi

Date: 15-Nov-2020

  • DeFI could be similar to the ICO craze in 2017
  • Low cap gem: AllianceBlock
  • AllianceBlock is bridging the gap between DeFi and CeFi
  • AllianceBlock Partnership with Orion Protocol and Chainlink.

Chico Crypto

Video Title: WARNING! An “EVIL” Entity Wants Control of BITCOIN…

Date: 15-Nov-2020

https://www.youtube.com/watch?v=45Ac-5y2ofg

  • 90% of Bitcoin’s mining pools are controlled by China based mining pools
  • As the value of bitcoin goes up – there is a threat of push to ‘control’ the network from China
  • Binance is looking to push through the 50% mining share and Chico believes this could be dangerous

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place. 

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

Continue Reading

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