cicerone imposter
 
  1  
Mon 15 Apr, 2013 04:48 pm
@BillRM,
Bitcoins are based on the "honor system" to pay taxes. LOL Mr. Green Drunk Drunk Drunk Drunk
BillRM
 
  1  
Mon 15 Apr, 2013 05:04 pm
@cicerone imposter,
Quote:
Bitcoins are based on the "honor system" to pay taxes. LOL


An so are transactions that involved US cash or transactions that involved non-cash deals such as paying someone a used car for doing some home repairs.

The gentleman that got paid for his work in terms of a used car would need to report the fair market value of the car for example as income for his labor.

A large percent of the taxes we paid are on the honor system as a matter of fact without bitcoins being involved and there is nothing illegal about it.

So by your way of thinking all cash payments, and all trades in kind are illegal in the US due to you having less of a problem in cheating on taxes if you wish to???????

LOL I and other family members had have small side businesses where we took in money and paid taxes on the income using form C and it happen everyday as a matter of fact.

In my family history my mother was raising birds and selling them in the 1950s and someone like you reported her on the theory that she was not reporting the income and she got a visit from an IRS agent however she was indeed reporting and paying taxes on the sale of the birds with details records.

Oh I forgot her father my grandfather was an independent master carpenter and he reported his income with my mother keeping his books.

All and all if you are going to declare bitcoins illegal as it aid in cheating on taxes then you would need to make payment in kind illegal and cash payments illegal and independent carpenters and so on...............
cicerone imposter
 
  1  
Mon 15 Apr, 2013 05:18 pm
@BillRM,
Used car sales are taxed - in California, and I'm sure in most, if not all, states.

On home repairs, you pay taxes on materials used. Anybody doing home repair has to pay taxes on the materials they purchase.

There isn't much the government can do on cheats who escape paying taxes on what's due. Is that you? LOL

BTW, I was an accountant, and understand tax laws at the corporate level (I was controller for several companies) and personal level. When I did consulting work, and had income property, our tax returns were more than half inch thick.
BillRM
 
  1  
Mon 15 Apr, 2013 05:28 pm
@cicerone imposter,
An how does any of that change with bitcoins?

Bitcoins does not make cheating on taxes any more easier then the millions of taxpayers who are in mainly cash businesses for example.
BillRM
 
  1  
Mon 15 Apr, 2013 05:51 pm
Interesting the Feds are going somehow try to control the exchanges for bitcions when most of those exchanges are not on US soil and tracking bitcoins is damn hard to say the least.

Take note also of the following statement however....The rules don't apply to individuals who simply use virtual currencies to purchase real or virtual goods


Quote:
http://www.economicpolicyjournal.com/2013/03/bitcoin-alert-us-treasury-announces.html

The U.S. is applying money-laundering rules to "virtual currencies," amid growing concern that new forms of cash bought on the Internet are being used to fund illicit activities.

he move means that firms that issue or exchange the increasingly popular online cash will now be regulated in a similar manner as traditional money-order providers such as Western Union Co. WU 0.00% They would have new bookkeeping requirements and mandatory reporting for transactions of more than $10,000.[...]


The arm of the Treasury Department that fights money laundering said Monday that the standard federal banking rules aimed at suspicious dollar transfers also apply to firms that issue or exchange money that isn't linked to any government and exists only online.

One of the fastest-growing alternative cash products is Bitcoin, an online currency launched in 2009 that isn't backed by a central bank or controlled by a central administrator. Currency units, known as "bitcoins" and consisting of a series of numbers, are created automatically on a set schedule and traded anonymously between digital addresses or "wallets." Certain exchange firms buy or sell bitcoins for legal tender at a rate that fluctuates with the market[...]law enforcement, regulators and financial institution have expressed worries about the hard-to-trace attributes of virtual currencies, helping trigger this week's move from the Treasury's Financial Crimes Enforcement Network, or FinCen.

Creating clear-cut rules for virtual currencies is difficult. A FinCen official said that anti-money-laundering rules would apply depending on the "factors and circumstances" of each business. The rules don't apply to individuals who simply use virtual currencies to purchase real or virtual goods.

The new guidance "clarifies definitions and expectations to ensure that businesses…are aware of their regulatory responsibilities," said Jennifer Shasky Calvery, FinCen director.

(ht Dale Fitz)
BillRM
 
  1  
Mon 15 Apr, 2013 06:57 pm

Quote:
https://en.bitcoin.it/wiki/How_to_accept_Bitcoin,_for_small_businesses#Paying_taxes_on_Bitcoin_income


taxes on Bitcoin income

Tax compliance is a topic of concern for small businesses. We aren't accountants or lawyers, and can't give legal or accounting advice.
But in many respects, Bitcoin transactions work very much like cash. Just like Bitcoin, cash is anonymous and doesn't leave a paper trail, yet is widely used in commerce every day.
Ask yourself how you would handle a cash transaction. Do you accept cash transactions? Do you normally pay taxes on cash transactions? The answer for Bitcoin should probably be the same.
As for how to decide what a Bitcoin transaction is worth... the IRS, as far as we know, has never issued a guide mentioning how to value Bitcoin transactions. But they probably have rules and guidelines on how to value transactions made in foreign currency or "cash equivalents". We imagine the accounting would be similar.
With Bitcoins, there's likely to be some difference between the value of BTC when you received them as payment, versus when you go to exchange them for another currency like USD, should you decide to do so. This scenario, likewise, would be no different if you accepted foreign currency or gold as payment. Under some scenarios, it might make sense to book the dollar value of BTC income as it is received, and then to book any difference incurred when it is exchanged for fiat currency. Under others, it might make sense to book the whole thing at the time of exchange.
Perhaps you might talk to your accountant. You don't need to get into a discussion with your accountant about block chains and private keys or the philosophy behind a decentralized currency. By comparing the fundamentals of Bitcoins to accounting concepts already well understood by the public, you can probably get all the answers you need. What would you ask your accountant if you decided that you wanted to accept Berkshire Bucks or 1-ounce gold coins as payment?
0 Replies
 
cicerone imposter
 
  1  
Mon 15 Apr, 2013 07:16 pm
@BillRM,
I never said that changed bitcoins. All I inquired were about tax liability.
0 Replies
 
cicerone imposter
 
  1  
Mon 15 Apr, 2013 07:19 pm
@BillRM,
This is the issue for the government,
Quote:
Currency units, known as "bitcoins" and consisting of a series of numbers, are created automatically on a set schedule and traded anonymously between digital addresses or "wallets."
BillRM
 
  2  
Tue 16 Apr, 2013 02:48 am
@cicerone imposter,
Quote:
This is the issue for the government,


I wish the US government and all governments for that matter luck in controlling an internet currency that had been design from the ground up by very bright people to be resistance to government interfere.

Thanks to the internet and tor and the darknet and bitcoins and on and on governments are going to have less power over their citizens lives not more so.

cicerone imposter
 
  0  
Tue 16 Apr, 2013 08:33 am
@BillRM,
You just don't understand governments; they will do everything they can to get their piece of the pie (tax revenue). You've learned nothing during your life in the US.
BillRM
 
  1  
Tue 16 Apr, 2013 11:35 am
@cicerone imposter,
Quote:
You just don't understand governments; they will do everything they can to get their piece of the pie (tax revenue). You've learned nothing during your life in the US.


You been paying a lot of state sale taxes on the internet lately?

You do know you are suppose to self report purchases to your state government and send a check do you not?

A few companies had agree to collect sale taxes for state governments but that is not the case for most of the net and unlikely to be in the future.
cicerone imposter
 
  1  
Tue 16 Apr, 2013 12:24 pm
@BillRM,
What's lately? I've been paying sales tax on internet purchases. Even Amazon now collects state taxes on their sales. Amazon realized that it's more profitable to make sales in California and collect sales taxes rather than not allow them to do business in California.

From the NYT.
Quote:
New York Court Upholds Sales Tax for Online Retailers
By DAVID STREITFELD
Published: March 28, 2013

New York’s highest court rejected arguments Thursday by two Internet retailers that they should be exempt from collecting state sales tax.
Amazon.com, the biggest online store, and its much smaller competitor Overstock.com had separately sued to challenge a 2008 state law that required online retailers to collect sales taxes on purchases made by New York residents. That served effectively to raise prices on the sites by nearly 10 percent, reducing their competitive advantage against brick-and-mortar retailers.
In a statement, Amazon denounced the New York Court of Appeals ruling as conflicting with precedents by the United States Supreme Court and decisions by other state courts. Overstock said it was considering appealing to the federal Supreme Court.

Central to the dispute was the question of affiliates, which are independent sites that link to a retailer in return for a commission. Thousands of Amazon affiliates are based in New York.

“The bottom line is that if a vendor is paying New York residents to actively solicit business in this state, there is no reason why that vendor should not shoulder the appropriate tax burden,” the appeals court wrote in its decision. The suits had been dismissed by lower courts.
BillRM
 
  1  
Tue 16 Apr, 2013 12:29 pm
@cicerone imposter,
Quote:
Even Amazon now collects state taxes on their sales. Amazon realized that it's more profitable to make sales in California and collect sales taxes rather than not allow them to do business in California.


Yes indeed a few big firms with brick and mortar buildings such as warehouses in a large number of states had roll over however most internet sales have zero sale taxes apply.

[quoteI]'ve been paying sales tax on internet purchases[/quote]

So you been self reporting and sending sale taxes checks to your state?
0 Replies
 
BillRM
 
  1  
Tue 16 Apr, 2013 12:37 pm
@cicerone imposter,
Oh a New York Court have what jurisdiction over an out of state firm with no physical existence in New York?

Somehow I do not think that they will win in the Federal court system.

cicerone imposter
 
  1  
Tue 16 Apr, 2013 12:40 pm
@BillRM,
You have a very myopic mind; we're talking about how governments do everything to collect sales taxes. That includes all levels of government in the country. That "is" the subject we were discussing.

That coincides with the general topic of this thread; bitcoins. They do business in every state of the union, don't they?

BillRM
 
  0  
Tue 16 Apr, 2013 12:43 pm
@cicerone imposter,
I am discussing that the internet even before bitcoin does not make it simple for governments at any level to tax commerce.
cicerone imposter
 
  1  
Tue 16 Apr, 2013 12:49 pm
@BillRM,
Oh! Since when?
Have you ever heard of evolution in commerce? Taxation on internet commerce is a common component today, and the government continues to make sure they get their share of any taxes due them.

Most state tax returns ask the taxpayer to report all purchases that sales/use taxes were not paid on.

To get around this problem, many states are requiring all vendors who sell in their state to collect sales taxes.

It's still a complex issue, but the governments will eventually collect their share of taxes from ecommerce.
BillRM
 
  1  
Tue 16 Apr, 2013 03:25 pm
@cicerone imposter,
Quote:
It's still a complex issue, but the governments will eventually collect their share of taxes from ecommerce.


Sorry but there are a sharp limits to government power any government power when it come to the internet in the case of taxes or for any other reason. With such elements as tor and the darknet running under tor and bitcoins and so on this is becoming more and more true.

As an example of that limit there is a very high profile darknet website that is openly selling illegal drugs and shipping them around the world and had been doing so for a year or two.

US senators had called for it being shut down and it is still up and running.

For any one who would like to take a look at the limit of governments power go to the following site the silk road.

http://silkroadvb5piz3r.onion.to/silkroad/home

Warning the location of the silk road website can not be found however by using the above address you are going to the darknet by way of a gateway where your IP address can be track.

If you wish that not to be true you need to install tor software at torproject.org and then you go to the silk road directly leaving off the .to in the address.

To sum up if the governments of the world have not yet found a way to prevent the selling and shipping of illegal drugs somehow the idea that New York state can get it sale taxes paid seems mildly unlikely.
cicerone imposter
 
  1  
Tue 16 Apr, 2013 03:30 pm
@BillRM,
You just don't understand history or how all levels of government are working to get their "fair share" of taxes. There will always be an underground economy where governments will not be able to collect taxes, but that would be in the minority. The penalty for tax evasion can be severe.

Quote:
Cost of Tax Evasion
The U.S. government estimates that approximately 3 percent of taxpayers do not file tax returns at all. While not filing taxes can involve both civil and criminal penalties, these are usually related to the amount of tax owed. For example, if a taxpayer does not owe any taxes, the penalties for not filing are less serious. However, failing to file a tax return for a year in which you do owe taxes is a crime. For each year a taxpayer does not file a return, the penalty can include a fine of up to $25,000 and a prison sentence of up to one year. If the IRS can demonstrate that the individual or company willfully did not file in an attempt to evade taxation, the IRS can pursue a felony conviction, which could include a fine of up to $100,000 and a maximum prison sentence of five years.
Although incarceration is rare, the threat is very real. Therefore, the best course of action is to file an accurate tax return on time every year. This is true even if you don’t have the money to pay the entire tax bill. In these cases, the IRS will work with you to set up a payment plan. If you need for more time to prepare an accurate tax return, such as owing to insufficient records, you can request an extension of time to file.
BillRM
 
  1  
Tue 16 Apr, 2013 03:39 pm
@cicerone imposter,
Quote:
You just don't understand history or how all levels of government are working to get their "fair share" of taxes. There will always be an underground economy where governments will not be able to collect taxes, but that would be in the minority. The penalty for tax evasion can be severe.


Yes indeed however at the moment the majority of sales on the internet is not being taxes and somehow I do not see it changing.

By the way how can a business know where you are living at in order to charge you that state sell taxes?

You can buy a gift for someone living in New York but not be living in New York yourself and IP addresses are not a good indication as I can show an IP address that check back to almost any country or US state for that matter.
 

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