IRS Is Carefully Watching Bitcoin and Other Cyber Currency
Big Brother is watching. Always watching. In this case, Big Brother is the IRS and you might be surprised what they’re looking into now. Although, when it comes to the IRS, nothing should surprise us.
Have you ever heard of Bitcoin? It’s one of a handful of virtual currencies that making buying and selling things in the digital age much easier. Essentially, virtual currencies are exactly that: virtual. They are not tangible, their value can fluctuate constantly and they only exist in cyberspace. But that’s not stopping the IRS from taking a closer look at how it can regulate them.
That’s because it appears that virtual currencies could be a new way for tax evaders to hide money “overseas.” Simply put, virtual currencies, like Bitcoin, offer secrecy with no trail to follow. That’s why the IRS has created a team of special agents to focus on tracking these virtual currencies. So if you’re trying to hide money through Bitcoin, beware.
To use Bitcoin you have to have a virtual wallet, as well as public addresses and private keys. What many people who use Bitcoin don’t know is that every transaction they make with Bitcoin is added to a record book known as a block chain. That means to review these transactions the IRS only has to access the block chain. It then follows that chain back to the public address that was used for the original Bitcoin transaction. The IRS then uses whatever measures it takes to link the address to the identity of the user.
That means using these virtual currencies may not actually be as secretive as users thought they were. So if you’re using one or more of these types of currencies, then as always beware of the taxman.
Seven Signs Your Noncompliance Will Be Considered Willful
Seven Signs Your Noncompliance Will Be Considered Willful There are many ways taxpayers can get the attention of the IRS. Although a lot of people make innocent mistakes when they file their tax returns, there are others who willfully look for ways to skip out on the taxes they owe. The IRS does treat those…
Make Sure Your Heirs Inherit What You Want
Make Sure Your Heirs Inherit What You Want. The saying goes that their only two things that are certain in life: death and taxes. While people can generate endless amounts of money when they’re alive, they can’t live forever and they can’t take that wealth with them when they die. However, they can have a…
Will Taxing the Rich Even More Improve Inequality?
Will Taxing the Rich Even More Improve Inequality? It’s been the cry of democratic lawmakers and many of the less fortunate for years: “We need to tax the wealthy even more.” “The rich have to pay their fair share of taxes, too.” The problem is the rich already pay a huge portion of the country’s…
It Pays to Be Rich for These Five Tax Breaks
It Pays to Be Rich for These Five Tax Breaks Although it’s true that the ultra-wealthy are heavily taxed, and in many cases unfairly, there are also some tax break advantages that favor the upper class more than those in the middle. Let’s take a look at some of these breaks. Most common and first…