IRS may create department to deal with Bitcoin
May 6, 2013 15:33:35 GMT -5
Post by PurplePuppy on May 6, 2013 15:33:35 GMT -5
IRS may soon create department to deal with growing Bitcoin currency
STOCK MARKET MAY 6, 2013BY: KENNETH SCHORTGEN JR
The Treasury Department has already established a departmental segment to regulate Bitcoin usage, and the Internal Revenue Service (IRS) may not be far behind. In a Forbes piece on Bitcoin and the IRS, Bitcoin transactions may soon be taxed and regulated the same as barter is, and become treated as an income source, verses a free flowing currency.
The IRS already gets a piece where you swap one product or service for another, as the IRS explains at its Bartering Tax Center. Soon the IRS may have a Bitcoin Center too. The Treasury unit called FinCEN, the Financial Crimes Enforcement Network, already has rules about Bitcoin and the IRS is likely to follow.
In the meantime, the tax rules seem pretty clear. If you provide services or sell goods for Bitcoin, you have income. If you exchange Bitcoins for cash, whether you have gain may depend on whether Bitcoin is really currency or commodity. The latter seems more likely, meaning you have gain to the extent of the appreciation in your Bitcoin. - Forbes
In reality, the United States is attempting to regulate an electronic currency under archaic rules (Barter), without the ability to fully enforce them. Bitcoin is an electronic currency, which runs peer to peer across a global domain, not residing in a single nation or sovereign state. And while the system documents all transactions publicly, users of the currency remain anonymous, and unable to be tracked.
The concept of barter, alternative currencies, and a monetary rebellion against governments and banking systems goes back to the founding days of America. The Whiskey Rebellion was started when Scotch-Irish immigrants wanted to use their whiskey products as a currency to barter for other goods, and rebelled when George Washington approved a tax on all whiskey sales and distribution. The result was many Scotch-Irish moving from the Northeast into the frontier territories of Kentucky and Tennessee where they could distill and barter without government intervention or taxation.
In the 1930's, the Federal government ordered the confiscation of all gold coins, under the penalty of fines or imprisonment, on all citizens in America. Many people willingly followed the order and turned in their gold, but the only real involuntary confiscation occurred during the bank holiday, when federal agents raided the safety deposit boxes of those having assets in a physical bank. But unlike the 1930's, in today's world we have the advent of the computer, global networking, and a currency created outside the confines of a sovereign nation, and these parameters may make it much more difficult for U.S., or any other government agency to feasibly tax and regulate transactions performed by consumers using Bitcoin.
www.examiner.com/article/irs-may-soon-create-department-to-deal-with-growing-bitcoin-currency
STOCK MARKET MAY 6, 2013BY: KENNETH SCHORTGEN JR
The Treasury Department has already established a departmental segment to regulate Bitcoin usage, and the Internal Revenue Service (IRS) may not be far behind. In a Forbes piece on Bitcoin and the IRS, Bitcoin transactions may soon be taxed and regulated the same as barter is, and become treated as an income source, verses a free flowing currency.
The IRS already gets a piece where you swap one product or service for another, as the IRS explains at its Bartering Tax Center. Soon the IRS may have a Bitcoin Center too. The Treasury unit called FinCEN, the Financial Crimes Enforcement Network, already has rules about Bitcoin and the IRS is likely to follow.
In the meantime, the tax rules seem pretty clear. If you provide services or sell goods for Bitcoin, you have income. If you exchange Bitcoins for cash, whether you have gain may depend on whether Bitcoin is really currency or commodity. The latter seems more likely, meaning you have gain to the extent of the appreciation in your Bitcoin. - Forbes
In reality, the United States is attempting to regulate an electronic currency under archaic rules (Barter), without the ability to fully enforce them. Bitcoin is an electronic currency, which runs peer to peer across a global domain, not residing in a single nation or sovereign state. And while the system documents all transactions publicly, users of the currency remain anonymous, and unable to be tracked.
The concept of barter, alternative currencies, and a monetary rebellion against governments and banking systems goes back to the founding days of America. The Whiskey Rebellion was started when Scotch-Irish immigrants wanted to use their whiskey products as a currency to barter for other goods, and rebelled when George Washington approved a tax on all whiskey sales and distribution. The result was many Scotch-Irish moving from the Northeast into the frontier territories of Kentucky and Tennessee where they could distill and barter without government intervention or taxation.
In the 1930's, the Federal government ordered the confiscation of all gold coins, under the penalty of fines or imprisonment, on all citizens in America. Many people willingly followed the order and turned in their gold, but the only real involuntary confiscation occurred during the bank holiday, when federal agents raided the safety deposit boxes of those having assets in a physical bank. But unlike the 1930's, in today's world we have the advent of the computer, global networking, and a currency created outside the confines of a sovereign nation, and these parameters may make it much more difficult for U.S., or any other government agency to feasibly tax and regulate transactions performed by consumers using Bitcoin.
www.examiner.com/article/irs-may-soon-create-department-to-deal-with-growing-bitcoin-currency
