Monday, March 31, 2014

CNN: New IRS rules make using Bitcoins a fiasco

The government regulations that will make it difficult to operate with Bitcoins are starting to come. But the IRS ruing is only the beginning. 

CNN on what the IRS just did:
The United States' new Bitcoin tax rules just made casual, everyday use a complicated bookkeeping headache.
The Internal Revenue Service's notice last week will force the average Bitcoin user to keep a strict record of every purchase made all year long -- then perform difficult calculations to account for the changing value of a bitcoin.
It's meant to extract taxes from any gains in Bitcoin's value, and the rule applies to everything bought with electronic money, from coffee to cars.
That's problematic for two reasons. The going rate for a bitcoin fluctuates wildly -- easily by more than $10 a day. And no one diligently records the price of a bitcoin at every purchase.
"That would obviously create an accounting nightmare for taxpayers and may cause taxpayers to avoid using virtual currency," said Jeffrey Hochberg, a tax attorney in New York.
Of course,  you can just take your chances and hope you don't become a target of the government. Ask Ross Ulbricht and Charlie Shrem how that strategy turned out. Most of what Ulbricht is alleged to have done and probably everything Shrem is alleged to have done would not be illegal in a private property society, but we don't live in a private property society. We live in a society where government spends most of its time expanding regulations that it can use as tools to crack down on anyone it wants at anytime.

Consider yourself warned.


  1. never ceases to amaze me how bitcoiners stick to the "you can't regulate bitcoin" story.
    This ruling makes dealing in bitcoin inconvenient and therefore makes the value of the bitcoin "property" close to worthless, like a stack of blank checks

  2. Hey guys, it is time to give up, ok. Wenzel thinks the paperwork is gonna be too tough. Just surrender to inflation forever.

  3. US-centric much?

    World is a big place. Nobody cares about some stupid IRS guidance. Bitcoins travel fast.

    1. True. Bitcoins were created by Agorists. Do you think Agorists give a $*%# about taxes? Bitcoins do not need "mass acceptance" in order for it to serve our needs.