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Yesterday’s news that the DoJ and IRS are digging into Binance amid whispers about allegations of tax fraud, manipulation and AML violations was just the latest indication from the government that it is taking enforcement of securities taxes tied to crypto wealth very seriously. In case that wasn’t already clear, WSJ published a story in its “Tax Report” section (with the federal tax deadline just days away at May 17) reminding readers that the IRS under President Joe Biden is coming for your crypto wealth – and those that don’t cough it up might be subject to harsh penalties, both financial and criminal.
Article from Zero Hedge.
It starts by reminding readers that two new IRS investigations to catch crypto tax cheats targeting various exchanges have been launched in recent months. In April, a judge in Boston approved an IRS summons to the payments company Circle and its affiliates, including the crypto exchange Poloniex. In May, a judge in San Francisco approved a similar summons for records from Kraken, another exchange based in California. Both summonses apply to customers who have traded more than $20K in crypto in any single year between 2016 and 2020.
“With these summonses and other actions, the IRS is mounting a full-court press to show taxpayers how seriously it takes cryptocurrency compliance,” says Don Fort, a former chief of IRS criminal investigation now with Kostelanetz & Fink. “Taxpayers should take it seriously too.”
Crypto exchanges don’t report client information to the IRS like discount digital brokerages do, so there’s temptation for traders to try and skate by. But if this approach worked in the past, be warned: that could change this year now that the Dems are back in power.
Binance doesn’t even allow American customers to trade on its platform (though it has been accused of illegally doing so by turning a blind eye to users trying to skirt this rule), but other investigations and summonses of note go back even further. In 2016, the IRS received approval for a similar summons for Coinbase and obtained information for about 13K customers. The agency sent letters urging many of them to make sure their crypto taxes were paid, as the IRS might soon be taking a hard look.
Admissions from the IRS in court filings suggest this tactic has been working for the agency. In one filing to justify its summonses, the the agency said it had received more than 1,000 amended tax returns and collected $13 million from crypto holders with more than $20,000 of transactions, plus another $12 million from other crypto notices, and audits are ongoing.
Remember, those who are caught skirting taxes often are forced to enter the IRS’s Voluntary Disclosure program for taxpayers with criminal liability, a program that usually lets participants out of prosecution but imposes large penalties.
Another filing hinted at a different strategy being employed by the agency: the agency plans to compare data it receives from Kraken to data on offshore crypto transactions. It didn’t identify the source of this offshore data to look for discrepancies. Kraken may also soon need to turn over phone numbers, email addresses, DoBs, tax ID numbers and other sensitive details as part of the subpoena.
With all this in mind, here’s a few quick reminders from WSJ:
When it comes to crypto tax laws, here are the basics: In 2014, the IRS declared that cryptocurrencies are property, not currencies like the dollar, and therefore are treated like an investment property akin to stocks. If an investor sells crypto after holding it for longer than a year, the profit is a typically considered a long-term capital gain, and taxed at lower rates than ordinary income under current law (although Congress may soon change this for the highest earners).
If the holding period is a year or less, the profit is a taxed as a short-term capital gain as the same rate as ordinary income like wages. Capital losses on crypto investments can offset taxable capital gains on other assets as well as crypto, plus up to $3,000 of ordinary income such as wages a year—a valuable benefit. Unused losses can be carried forward to future years.
Tax triggers: Any time a cryptocurrency is bought or sold or spent is a taxable transaction. If you trade bitcoin for dogecoin, that transaction has tax exposure.
If you buy a tesla, you will owe an additional tax on the transfer on top of any sales taxes you pay. These rules make bitcoin difficult to use for payments, something that regulators no doubt intended.
Lot identification: Investors who bought the same coin at different prices can often minimize taxes by selling the lot that would give them the smallest tax exposure. For example, say that someone sold bitcoins at $22,000 each in December 2020 and had coins bought in 2016 for $600 and 2017 for $16,000. Selling the 2016 coins would mean a taxable gain of $21,400 each, while selling the 2017 coins would mean a gain of $6,000 each—a big difference.
Offshore holdings: In late 2020, the Financial Crimes Enforcement Network, a Treasury Department unit known as FinCEN, announced that it may soon require US taxpayers holding more than $10,000 of cryptocurrencies offshore to file FinCEN Form 114, known as the FBAR, to report these holdings. But this rule has yet to be adopted, and wasn’t in effect for 2020.
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Source: WSJ
‘The Purge’ by Big Tech targets conservatives, including us
Just when we thought the Covid-19 lockdowns were ending and our ability to stay afloat was improving, censorship reared its ugly head.
For the last few months, NOQ Report, Conservative Playbook, and the American Conservative Movement have appealed to our readers for assistance in staying afloat through Covid-19 lockdowns. The downturn in the economy has limited our ability to generate proper ad revenue just as our traffic was skyrocketing. We had our first sustained stretch of three months with over a million visitors in November, December, and January, but February saw a dip.
It wasn’t just the shortened month. We expected that. We also expected the continuation of dropping traffic from “woke” Big Tech companies like Google, Facebook, and Twitter, but it has actually been much worse than anticipated. Our Twitter account was banned. Both of our YouTube accounts were banned. Facebook “fact-checks” everything we post. Spotify canceled us. Medium canceled us. Apple canceled us. Why? Because we believe in the truth prevailing, and that means we will continue to discuss “taboo” topics.
The 2020 presidential election was stolen. You can’t say that on Big Tech platforms without risking cancellation, but we’d rather get cancelled for telling the truth rather than staying around to repeat mainstream media’s lies. They have been covering it up since before the election and they’ve convinced the vast majority of conservative news outlets that they will be harmed if they continue to discuss voter fraud. We refuse to back down. The truth is the truth.
The lies associated with Covid-19 are only slightly more prevalent than the suppression of valid scientific information that runs counter to the prescribed narrative. We should be allowed to ask questions about the vaccines, for example, as there is ample evidence for concern. One does not have to be an “anti-vaxxer” in order to want answers about vaccines that are still considered experimental and that have a track record in a short period of time of having side-effects, including death. One of our stories about the Johnson & Johnson “vaccine” causing blood clots was “fact-checked” and removed one day before the government hit the brakes on it. These questions and news items are not allowed on Big Tech which is just another reason we are getting canceled.
There are more topics that they refuse to allow. In turn, we refuse to stop discussing them. This is why we desperately need your help. The best way NOQ, CP, and ACM readers can help is to donate. Our Giving Fuel page makes it easy to donate one-time or monthly. Alternatively, you can donate through PayPal as well. We are pacing to be short by about $3700 per month in order to maintain operations.
The second way to help is to become a partner. We’ve strongly considered seeking angel investors in the past but because we were paying the bills, it didn’t seem necessary. Now, we’re struggling to pay the bills. We had 5,657,724 sessions on our website from November, 2020, through February, 2021. Our intention is to elevate that to higher levels this year by focusing on a strategy that relies on free speech rather than being beholden to progressive Big Tech companies.
During that four-month stretch, Twitter and Facebook accounted for about 20% of our traffic. We are actively working on operating as if that traffic is zero, replacing it with platforms that operate more freely such as Gab, Parler, and others. While we were never as dependent on Big Tech as most conservative sites, we’d like to be completely free from them. That doesn’t mean we will block them, but we refuse to be beholden to companies that absolutely despise us simply because of our political ideology.
We’re heading in the right direction and we believe we’re ready talk to patriotic investors who want to not only “get in on the action” but more importantly who want to help America hear the truth. Interested investors should contact me directly with the contact button above.
As the world spirals towards radical progressivism, the need for truthful journalism has never been greater. But in these times, we need as many conservative media voices as possible. Please help keep NOQ Report going.
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‘The Purge’ by Big Tech targets conservatives, including us
Just when we thought the Covid-19 lockdowns were ending and our ability to stay afloat was improving, censorship reared its ugly head.
For the last few months, NOQ Report, Conservative Playbook, and the American Conservative Movement have appealed to our readers for assistance in staying afloat through Covid-19 lockdowns. The downturn in the economy has limited our ability to generate proper ad revenue just as our traffic was skyrocketing. We had our first sustained stretch of three months with over a million visitors in November, December, and January, but February saw a dip.
It wasn’t just the shortened month. We expected that. We also expected the continuation of dropping traffic from “woke” Big Tech companies like Google, Facebook, and Twitter, but it has actually been much worse than anticipated. Our Twitter account was banned. Both of our YouTube accounts were banned. Facebook “fact-checks” everything we post. Spotify canceled us. Medium canceled us. Apple canceled us. Why? Because we believe in the truth prevailing, and that means we will continue to discuss “taboo” topics.
The 2020 presidential election was stolen. You can’t say that on Big Tech platforms without risking cancellation, but we’d rather get cancelled for telling the truth rather than staying around to repeat mainstream media’s lies. They have been covering it up since before the election and they’ve convinced the vast majority of conservative news outlets that they will be harmed if they continue to discuss voter fraud. We refuse to back down. The truth is the truth.
The lies associated with Covid-19 are only slightly more prevalent than the suppression of valid scientific information that runs counter to the prescribed narrative. We should be allowed to ask questions about the vaccines, for example, as there is ample evidence for concern. One does not have to be an “anti-vaxxer” in order to want answers about vaccines that are still considered experimental and that have a track record in a short period of time of having side-effects, including death. One of our stories about the Johnson & Johnson “vaccine” causing blood clots was “fact-checked” and removed one day before the government hit the brakes on it. These questions and news items are not allowed on Big Tech which is just another reason we are getting canceled.
There are more topics that they refuse to allow. In turn, we refuse to stop discussing them. This is why we desperately need your help. The best way NOQ, CP, and ACM readers can help is to donate. Our Giving Fuel page makes it easy to donate one-time or monthly. Alternatively, you can donate through PayPal as well. We are pacing to be short by about $3700 per month in order to maintain operations.
The second way to help is to become a partner. We’ve strongly considered seeking angel investors in the past but because we were paying the bills, it didn’t seem necessary. Now, we’re struggling to pay the bills. We had 5,657,724 sessions on our website from November, 2020, through February, 2021. Our intention is to elevate that to higher levels this year by focusing on a strategy that relies on free speech rather than being beholden to progressive Big Tech companies.
During that four-month stretch, Twitter and Facebook accounted for about 20% of our traffic. We are actively working on operating as if that traffic is zero, replacing it with platforms that operate more freely such as Gab, Parler, and others. While we were never as dependent on Big Tech as most conservative sites, we’d like to be completely free from them. That doesn’t mean we will block them, but we refuse to be beholden to companies that absolutely despise us simply because of our political ideology.
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We’re heading in the right direction and we believe we’re ready talk to patriotic investors who want to not only “get in on the action” but more importantly who want to help America hear the truth. Interested investors should contact me directly with the contact button above.
As the world spirals towards radical progressivism, the need for truthful journalism has never been greater. But in these times, we need as many conservative media voices as possible. Please help keep NOQ Report going.
Bitcoin: 32SeW2Ajn86g4dATWtWreABhEkiqxsKUGn
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