Daily Management Review

IRS will strengthen surveillance over bitcoins owners


09/12/2017


Americans are slow to declare the income received from operations with crypto-currencies, and therefore the IRS is now looking for ways to track the crypto community and intends to "tighten the screws".



According to media reports, the IRS has been using software to identify users of bitcoin since 2015. The interest, of course, is dictated to a greater extent by identification of money laundering through bitcoins. But, of course, the crypto currency can be used by citizens to conceal their states or to evade taxes. Recently, the agency has entered into a partnership agreement with Chainalysis, a company specializing in the development of related software.

The IRS began issuing recommendations on the taxation of bitcoin in March 2014. At that time, the agency stated that it would consider bitcoin as property and, for tax purposes, losses or profits would be treated accordingly as loss or capital gains. It should be noted that numerous stories about people who suddenly became rich thanks to investments in crypto-currencies almost never tell anything about tax payments.

Despite the seeming anonymity of bitcoin, there are ways to de-anonymize it. Specialized software allows you to visualize, monitor and analyze movement of bitcoin transactions from wallet to wallet and up to exchanges where the currency is converted into fiat money.

The last stage is just one of the weakest links in the chain: having data on transactions, law enforcement agencies can summon exchange representatives to court and oblige them to disclose information about who exactly is behind a particular transaction. So, recently the IRS demanded that the crypto-exchange Coinbase identify all those who sold bitcoins worth more than $ 20 thousand in 2013-2015. At the same time, the IRS reserves the right to apply to the court in individual cases if it considers that it may be a matter of tax evasion.

As for illegal acts paid with the help of crypto currency, bitcoin is losing popularity here, CNBC reports with reference to President of the research company Blockchain Intelligence Group.

Over the past year, the number of illegal transactions in darknet using bitcoin has decreased to 20%. Prior to this, the first crypto currency was used in about 50% of illegal transactions. Instead of bitcoin, the criminals switched to altcoins Montero and Ethereum.

source: bloomberg.com






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