IRS to Build Tax Evasion Cases

The U.S. Internal Revenue Service has begun preparations to bring down the hammer on Bitcoin tax cheats  
09 February 2018   195

US residents have two more months to submit their annual federal tax returns. The Internal Revenue Service will treat very harshly Bitcoin tax cheats.

The agency has assigned a team of elite criminal agents to investigate whether Bitcoin and other cryptocurrencies are being used to cheat the taxman.

According to IRS chief Don Fort, it’s possible to use Bitcoin and other cryptocurrencies in the same way as foreign bank accounts to facilitate tax evasion. He also informed that the agency hasn’t charged anyone yet, but the cases will come. Under current US law, cryptocurrency owners are required to pay taxes on profits realized from any cryptocurrency transaction. It is clear that if you have realized profits from cryptocurrency investments, you will have to pay taxes.

This new technology is a big challenge for the IRS, they need to educate themselves on what is a blockchain. The agency lost its key staffers since 2011 on account of budget cuts. This team will help the agency to return its full strength, complete with its own crew of blockchain experts.

There are three so-called types of bitcoiner: 1) those intending to pay, 2) those hoping the IRS will not hunt them, because there are bigger “fish to fry”, 3) those willing not to pay. They even ready for moving to Puerto Rico. Of course, days of wide-scale cryptocurrency tax avoidance are almost in the past.

Bank of America: Cryptocurrencies Are a Threat

Bank of America (BoA) has admitted to US regulators it can not pretend any longer that cryptocurrencies are not a threat
23 February 2018   128

On February 22, the report was filed with the US Securities and Exchange Commission (SEC). It listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. Crypto adoption was on the list for the first time.

Bank of America (BoA), which recently banned purchasing of crypto with credit cards, stated that this and other similar policies could cost the bank clients.

Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.

The second largest bank in the U.S. said that adoption of cryptocurrencies could require the bank to make “substantial expenditures” to update its existing services and remain competitive with upstart firms.

The widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

According to the Bank of America, cryptocurrencies could limit the institution’s ability to comply with anti-money laundering regulations.

Eventually, this is one of the first public admissions that financial institutions are beginning to worry that mass cryptocurrency adoption could one day become a reality.