back to article US Treasury wants to treat cryptocurrencies like cash – as in you need to report $10k+ transactions

American businesses that receive payments in cryptocurrencies worth $10,000 or more will have to report those transactions to the Internal Revenue Service, the United States' Treasury mentioned on Thursday. This simply puts crypto-coins on the same footing as cash: the IRS says "federal law requires a person to report cash …

  1. RegGuy1 Silver badge

    Crypto is not owned by a government

    And that's seen as a problem -- by governments. Just like the so-called 'human cloud' -- where someone can work for a company from anywhere in the world and can avoid paying local taxes -- so crypto gives much more control to an individual.

    Governments don't like this, because they have no control. So expect to see much more of this navel gazing as they try to work out how to stop being screwed by their citizens and citizens from the rest of the world.

    1. Joe W Silver badge

      Re: Crypto is not owned by a government

      I see it as a problem as well (like the human cloud you cite, which is basically tax evasion). Simple as that. There are problems with money laundering, always have been (and always will be, I guess), and those rules are there for a reason.

      And you seem to agree (as of your last sentence, unless you think that we all should screw over our government, our country and finally our fellow citicens who do pay taxes or are dependent on social benefits like health care, retirement or unemployment benefits).

      Whether you find taxes (and mandatory insurance like unemployment, health care etc.) or those anti-money-laundering-rules unfair/unreasonable/stupid or not is a different discussion.

    2. Anonymous Coward
      Anonymous Coward

      Re: Crypto is not owned by a government

      The US is unique in the world as the federal government taxes it’s citizens and corporations on all of their worldwide income. And in whatever form they are paid. They are required to disclose it.

      1. Stork Silver badge

        Re: Crypto is not owned by a government

        No, US is not quite unique. Eritrea have similar laws, but I can imagine their enforcement is still not at the same level.

  2. David Pearce

    But it is "money"

    Any time I want to move for than USD 10000 between countries, it has been reported to the national bank for many years under anti money-laundering laws..

    Why should moving BTC around be a free pass to avoiding this?

    1. Anonymous Coward
      Anonymous Coward

      Re: But it is "money"

      It shouldn’t. Computers does most of the monitoring and looks for transaction patterns, such as making multiple small transfers to add up to the 10,000. These accounts get flagged for a human to review. Whom will then probably file an SAR with SEC. At least this was a case of the last brokerage firm I worked at.

  3. Ken Moorhouse Silver badge

    Money Traceability

    One problem with Crypto from the authorities' point of view is that someone could invest a few quid in Crypto, then a while later extract it at some phenomenal increase. Maybe the "investments" might have been made in several "under the radar" tranches. "Where did that money come from?" "Well, it was well below the radar when I put it in, and well above when I took it out." So they are either going to have to bear that in mind in their investigations, or to insist that the monetary appreciation details are outlined in the declaration, similar to the way Capital Gains are worked out.

    I suspect that a lot of tax-authority-probe-phobes will choose to avoid crypto, simply to avoid the hassle of what the authorities think, especially if AI is a part of that thought process.

    1. Anonymous Coward
      Anonymous Coward

      Re: Money Traceability

      I suspect the transactions of a bitcoin speculator will look much different than those of a criminal enterprise using bitcoin to launder money.

      1. Anonymous Coward
        Anonymous Coward

        Re: Money Traceability

        "...transactions of a bitcoin speculator will look much different...."

        Nope. If they did, those money launderers wouldn't be very good money launderers would they?

        Crazy thing is, crypto has already been maxed taxed once it hits the floor AFTER the miner and power company have paid their taxes, very much like a "product" (if not identical). In effect, these laws revolving around crypto will very much resemble investments, _NOT_ currency trading. So, what does that really say about crypto "currency"? To me, crypto seems to be coming of age as more of a product than a currency, but a product for what application?

        If anything, governments never legitimizing crypto in any way would of made more sense, but giving it any room gives room for laundering. However, maybe that is what the rich/governments actually want... another avenue to launder (after all, who makes the laws? Who launders?).

  4. amanfromMars 1 Silver badge

    Changed Glory 0Days indeed ......

    .......and just in time too to witness global fiat reserve currency collapses and rebalancings

    If you can't beat them, join them then appears to be the Fed's new default position and that is tantamount to an admission of defeat against overwhelmingly superior forces and an invisible intangible foe/anonymous autonomous program although anyone/anything claiming it as a victory will be hard pressed to cogently express its benefits and virtues/advantages and conveniences.

  5. This post has been deleted by its author

  6. Mike 137 Silver badge

    So every time you fall to ransomware

    You'll have to report the ransom payment. Indeed, every time you transfer a single bitcoin to anyone, you'll have to report it. That could make its value rather burdensome.

    1. Joe W Silver badge

      Re: So every time you fall to ransomware

      Only if the current trading value is above 10000 USD (or 10000 EUR, or whatever the limit is). But yes.

    2. bombastic bob Silver badge
      Devil

      Re: So every time you fall to ransomware

      As I understand it, if you pay $10k or more there might be a 1099 form for that, which you'd send to the IRS and a copy to the person/entity you filed it for. But when you deposit the check in the bank (for over $10k) the bank reports it. That's my understanding, at any rate. I would expect it would accompany every OTHER disclosure, like payroll and tax forms.

      But if "they" suspect something, they'll just audit you. Or, if you make enough money. Etc.

      A ransomware payment would be a HUGE line item in the books. Reporting it would be the LEAST of your problems.

      1. Ken Moorhouse Silver badge

        Re: deposit the check in the bank (for over $10k) the bank reports it

        In the UK I believe it is cash that triggers a report. A check/cheque is more easy to trace and therefore does not need to be reported.

  7. Marty McFly Silver badge
    Pint

    The government will shut down Bitcoin, just watch!

    They will send in the troops and they will lay siege to the Bitcoin headquarters. All the BTC servers will be completely disconnected and and held as evidence against those evil cryptocurrency people. Only government controlled & monitored currency will be allowed to continue. This nonsense has to stop!

    Only problem is the government just can't seem to find the big building with the BTC logo on the side. (Enter visions of Monty Python searching for the Holy Grail, except now it is government lackeys searching for the elusive Bitcoin headquarters.)

    All joking aside...

    Cryptocurrencies are inherently a better store of wealth than any fiat currency. They are even better than precious metals. What governments can do is make it more difficult to move between fiat and crypto. That means it is important to get your share of crypto today because tomorrow the door may not be open to you.

    1. Version 1.0 Silver badge
      Joke

      Re: The government will shut down Bitcoin, just watch!

      So many a raid on the British Tobacco Company is coming?

    2. Anonymous Coward
      Anonymous Coward

      Re: The government will shut down Bitcoin, just watch!

      "What governments can do is make it more difficult to move between fiat and crypto. That means it is important to get your share of crypto today because tomorrow the door may not be open to you."

      If you anticipate governments will restrict fiat/crypto conversions in the future, isn't that an argument to stay *out* of crypto completely?

      1. Marty McFly Silver badge

        Re: The government will shut down Bitcoin, just watch!

        >"If you anticipate governments will restrict fiat/crypto conversions in the future, isn't that an argument to stay *out* of crypto completely?"

        Fair question. You are assuming the only reason to go to crypto is for investment. Buying/selling goods/services with crypto currency is what the future will hold. People with crypto currency will be free to operate in that space because they already own crypto currency. They can do business independent from government intrusion, oversight, and taxation.

        People without crypto currency will be stuck dealing with a fiat monetary system of perpetual inflation that is highly regulated, monitored, and controlled.

        That is what is scaring the modern money managers. They could lose their control of the finances of the masses. When you & I agree to exchange crypto for goods & services, and we do so in a private transaction, then that is no one's business but our own.

        1. Ken Moorhouse Silver badge

          Re: agree to exchange crypto for goods & services, and we do so in a private transaction

          Which means a money launderer could buy a Tesla with bitcoin (if Tesla followed through on that whim), without alerting the authorities. I'm sure that the authorities would step in and insist that any such transactions must be notified i.e., bitcoin is treated equivalent to cash.

    3. doublelayer Silver badge

      Re: The government will shut down Bitcoin, just watch!

      Your core points are disputable. I'm taking them out of order.

      "What governments can do is make it more difficult to move between fiat and crypto. That means it is important to get your share of crypto today because tomorrow the door may not be open to you."

      No, that's not what that means, assuming for the moment that they're going to do that. If they're going to cut the transfer mechanisms between crypto and fiat, then a lot of people who use crypto as an investment are going to sell then. Crypto will be much cheaper for me, as someone who wants to use it as a currency, once the investors get out. It would do me well to wait. In addition, having some crypto if I had to start using it as a currency will do me little good if I'm still being paid in fiat and can't convert them easily. Only if everyone agrees to use crypto would I get a lot of value from it, in which case I will get crypto in my paycheck. Under your system where the government is running a full-on assault on crypto, that seems unlikely.

      "Cryptocurrencies are inherently a better store of wealth than any fiat currency. They are even better than precious metals."

      On what basis? Current attempts are hideously volatile, which most fiat currencies and precious commodities avoid. They're also a lot harder to spend. Until those things get fixed, crypto is failing at both the store of value and medium of exchange parts. This isn't an intrinsic defect of the system, and I think a more stable cryptocurrency is possible, but that doesn't mean it exists now or that it ever will.

    4. Stork Silver badge

      Re: The government will shut down Bitcoin, just watch!

      I have posted this before: https://www.johnkay.com/2018/03/05/bitcoin-boon-bubble/

      After reading this, do you still believe Cryptocurrencies are so wonderful?

  8. Anonymous Coward
    Anonymous Coward

    Most transactions of anything involving commerce is digital - or do you think buying candy bars with credit cards is always the way it has been done. The use of new mediums of exchange, as long as people accept them as equivalent to the currencies they are being substituted for, is fair and legal game for the tax man.

  9. Claptrap314 Silver badge

    In the US, barter is taxable

    We get to read about some group learning that the hard way every couple of years.

    And the reporting requirements are pretty low, as well.

    1. Ken Moorhouse Silver badge

      Re: In the US, barter is taxable

      One of my clients signed up with Bartercard (UK) a long time ago. He was unable to trade out his accrued points/pounds for anything useful trade-related, and ended up buying some limited edition prints for his office just to wind up quits.

      Far too much hassle IMO.

  10. Trigonoceps occipitalis Silver badge

    Lost Bitcoin

    Every now and again there are reports, usually exaggerated, of wallet owners who lave lost or encrypted their hard disk consequently losing "$40M" or whatever. What proportion of digital currency is irretrievably lost and is it important?

  11. adam 40 Silver badge

    $10k limit?

    Shurely it's easy enough to split any digital payment into a bunch of sub-$9k payments that don't have to be reported?

    Drug barons have been doing that for many years....

    1. Ken Moorhouse Silver badge

      Re: split any digital payment into a bunch of sub-$9k payments

      Have you heard of Benford's Law? I am certain HMRC+IRS will have. Thing is that it is the *overall* transaction that has to be reported.

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