Bře 20

IRS: Only 800 People Reported Bitcoin Earnings Per Year

· March 20, 2017 · 6:00 am

Taxing times continue at Coinbase as the Internal Revenue Service (IRS) reveals only 800 people report Bitcoin gains on returns annually.


IRS: 800 People Per Year Reporting and Falling

The exchange and wallet provider is currently facing enforced submission of its transaction records after the IRS went to court earlier this month.

In data released as part of the lawsuit, the authority reveals that in 2015 only 802 people reported Bitcoin gains on tax form 8949, and that the number had been decreasing year on year.

“The IRS searched the MTRDB for Form 8949 data for tax years 2013 through 2015,” the affidavit from IRS agent David Utzke quoted by Fortune reads.

Bitcoin_taxes_article_1_Bitcoinist

Coinbase responded to the new pressure to reveal its customers’ history last week by saying it “remains concerned with the indiscriminate and over broad scope of the government’s summons” and its legal team was reviewing the situation.

A blog post continues:

We will continue to work with the IRS to assess the government’s willingness to fundamentally reconsider the focus and scope of the summons. If it does not, we anticipate filing opposition papers in court in coming months.

Coinbase: ‘Don’t Store Funds On Coinbase’

While the company, which has served over 6.2 million customers, fights regulators on one front, no less burdensome is the current climate within the Bitcoin industry itself.

Escalating mining fees caused Coinbase to halt payment of fees for customer transactions from March 21, while most recently, it even began advising customers not to hold funds on its exchange books.

The warning to store bitcoins outside its exchange was due to potential implications of a hard fork, namely restricting access to customer funds which plagued the Ethereum hard fork in summer 2016.

farmer

“Customers who wish to access both blockchains at the time of the hard fork should withdraw their BTC from Coinbase since we cannot guarantee what will happen during the hard fork or when this access may be available,” an accompanying post from Director at Coinbase David Farmer read Sunday.

Customers should take note that they will not be able to withdraw bitcoin from or deposit bitcoin to Coinbase for a period of up to 24 hours or more following the fork. In the event of a hard fork of the Bitcoin protocol, Coinbase may suspend the ability to buy or sell on our platform during this time.

Coinbase was not one of the exchanges which signed a joint letter Friday stating a hard fork would mean Bitcoin Core would retain the BTC ticker, while Bitcoin Unlimited would become BTU.

What do you think about Coinbase’s handling of the IRS and hard fork possibilities? Let us know in the comments below!


Images courtesy of Shutterstock, LinkedIn

Show comments

Share
Led 22

Bitcoin is Being Increasingly Regulated Across the Globe

· January 22, 2017 · 4:00 am

Countries are reiterating tax specifications as Bitcoin becomes increasingly regulated around the globe amid rising price and popularity. 


Bitcoin Taken Seriously, Increasingly Regulated

Starting the year in the $1,000 USD range, Bitcoin has had an eventful month and January isn’t even over yet! So far, we’ve seen many countries take a new stance on Bitcoin in regard to regulations and taxes.

Although this may cause some commotion in the short-term, as seen with the Public Bank of China inspections, which led to a crash in the price, it’s actually great news for Bitcoin. It means countries are taking Bitcoin seriously (as they should), allowing it to intermingle with their traditional economies, rather than considering national bans.

Although we doubt that Bitcoin will be chosen as the official currency by any country in the near future, 2017 may hold great things for Bitcoin. Below are just some of the countries, who have recently reiterated their stance or are starting to consider regulating virtual currencies.

Poland

In Poland, Bitcoin miners were subject to a 23% VAT when selling the cryptocurrency. This is because mining was considered a service and the act of selling Bitcoin was subject to a fee for this service.

Even recently, in November 2016, a case in the city of Poznan led the Finance Minister to rule that the sale of bitcoins is an act subject to VAT as a supply of services.

poland

However, a recent case in January where a company issued foreign customers invoices in U.S dollars to be paid in Bitcoin led the country to revisit the subject. The Minister of Finance decided that the action selling bitcoins, for which the taxpayer occasionally received as compensation for services rendered, does not constitute an economic activity. Thus, Bitcoin is not subject to VAT.

The Minister pointed out that the sale of virtual currency would be taxed only if the company conducted professional activity in this field (eg. currency, banking services) and charged a commission fee for doing so.

The decision was based on the ruling of the European Court of Justice in October 2015, which stated that bitcoin transactions are exempt from the consumption tax since Bitcoin is used as a means of payment and not as a commodity.

Israel

The Israeli Tax Authority, however, has taken a different stance on the subject and has classified Bitcoin as taxable asset, and not as a currency or payment system.

A new document issued by the Israel Tax Authority on January 12th states that Bitcoin, Litecoin and other virtual currencies are considered neither as currencies or financial securities and are instead taxable assets that are subject to capital gains tax and value added tax (VAT).

israel

Individuals will be required to pay the capital gains tax of 25% every time they sell a cryptocurrency. Companies and individuals that are trading, marketing or mining bitcoin will be taxed as a business and must charge their clients a 17% VAT. Companies that accept Bitcoin payments, will need to classify the exchange as barter, which will lead to extra paperwork for the company.

The document was issued in response to the repeated questions from cryptocurrency users in the country. Although the new tax laws will make the life of cryptocurrency users harder, the regulatory landscape has at least emerged from the uncertain gray area.

China

Although no new regulations have yet been issued by the country, the latest developments suggest they will soon be.

Following the inspections carried out by the People’s Bank of China to domestic exchanges, these have halted margin trading services, which has led some to believe that new regulations are on the horizon.

Trading fees may also be applied to exchanges in China, as seen in the warning posted on BTCC’s official website.

China Bitcoin Core attack

Currently, citizens in China are free to hold and trade bitcoins, although financial firms cannot. The regulatory framework issued by China in 2013 sees Bitcoin, not as a currency, but as a virtual commodity. 

The sale and importation of commodities are subject to a 17% VAT in the country.

Russia

Russia, which has always had a difficult relation with the cryptocurrency has surprised many on this subject by stating that no further action will be taken by the government to prohibit the use of Bitcoin.

Russians_paywithBTC_articlecover_Bitcoinist

Instead, the Bank of Russia will try to attain a better knowledge of Bitcoin and build a regulatory framework around it. Bank of Russia’s Deputy Chairman Olga Skorobogatova stated:

It became clear that it is not straightforward to address Bitcoin with existing financial regulation. Regulators and financial agencies agree to not prohibit the use of Bitcoin. Instead, we want to gain a better understanding of Bitcoin, and build a regulatory framework we have gathered the necessary knowledge.

Nigeria

In Nigeria, where crypto-themed Ponzi schemes like OneCoin and Swisscoin are highly popular, warnings have been issued by two separate authorities, the Securities and exchange commission (SEC) and the Central Bank of Nigeria (CBN).

Bitcoinist_Central Bank of Nigeria

Although no new regulations have been issued, both notices warn users and financial institutions regarding the legal status of cryptocurrencies, which are not seen as legal tender, stating that financial institutions should deal with cryptocurrencies at their own risk.

Both notices mention OneCoin as a cryptocurrency, which demonstrates the lack of knowledge some countries still face when dealing with Bitcoin and other digital currencies.

For more about how Bitcoin is regulated (or unregulated) in other countries, go here.

What’s your take on the recent regulatory developments in the world of Bitcoin? Are they a step in the right direction? Let us know below!


Images courtesy of shutterstock

Show comments

Share
Srp 15

Industry Report: Big Bounty May Help Bitfinex Get its Money Back

Source: bitcoin

Industry Report: Big Bounty May Help Bitfinex Get its Money Back

A Bitfinex bounty, Russia changes its stance on bitcoin, and a rough fate lies ahead for an alleged Silk Road forum operator. Want to catch up on your latest digital currency news? Take a look below.

Also read: Industry Report: Bitfinex Forces Customers to Pay for Hack Losses

BITFINEX

Hong Kong exchange Bitfinex has announced a $3.5 million bounty reserved for anyone who can help in their investigation to uncover the $72 million stolen from customer wallets last week. Explaining the terms, Director of Community and Product Development Zane Tackett states:

“5% of recovery and for information leading to recovery (but no bounty if no recovery); if multiple persons lead to recovery, share pro rata.”

Tackett is also refusing to draw up a contract offering explicit details until he can consult with the rest of the team.

In a related story, a bitcoin miner at Hashocean seems to have disappeared with millions of dollars in investors’ money. The website is down, reporting an error message when visited, and the miner has left no trace. Users are working hard to find the truth and earn their funds back.

RUSSIA

After years of saying, “We hate bitcoin,” Russia is reversing its stance on the digital currency and potentially revoking its plan to penalize users. In the past, Russian authorities have sworn to enforce fines and even hand out prison time for those who indulge in the art of cryptocurrency, but now the country seems to be having a change of heart. Rather, financial experts have suggested taxing bitcoin over penalizing it. Sources explain:

“Resident natural persons are obliged to provide reports to tax authorities located at the place of their registration as to account moves through banks beyond the Russian Federation pursuant to the procedures established by the Decree of the Government of the Russian Federation No. 1365 dated 12.12.2015.”

While nothing has been set in stone, the idea is that if tax-hounds get their way, criminalizing bitcoin will have to be put on hold or discarded fully. Obviously, authorities can’t have it both ways.

GARY DAVIS

28-year-old Irishman Gary Davis is set to be extradited and sent back to the U.S. for questioning regarding his alleged role with Silk Road. He has been charged with conspiracy to distribute illicit drugs, computer espionage, and money laundering.

According to the FBI, Davis worked as a Silk Road forum operator under the name “Libertas,” and had a personal relationship with Ross Ulbricht. David denies all allegations and is looking to appeal his case to the High Court. He explains:

“The prospect of being torn from my support network here in Ireland, which is essential for my mental well-being, flown halfway across the world, and being dumped into an American Gulag to rot while facing outrageous charges is gut-wrenching in the extreme. The conditions in the Metropolitan Correctional Center, New York, where I would be held post-extradition and pre-trial, are deplorable.”

Know of any stories that belong in our regular industry report pieces? Post your comments below!


Images courtesy of Bitcoinist.net, IrishTimes.

The post Industry Report: Big Bounty May Help Bitfinex Get its Money Back appeared first on Bitcoinist.net.

Industry Report: Big Bounty May Help Bitfinex Get its Money Back

Share
Úno 26

Spondoolies Tech Gets Approval for BTCS Merger

Source: bitcoin

Spondoolies Tech Gets Approval for BTCS Merger

Arlington, VA – BTCS Inc. (OTCQB: BTCS) (“BTCS” or the “Company”), a blockchain technology focused company which secures the blockchain through its transaction verification services business, and Spondoolies-Tech Ltd. (Spondoolies), an Israeli transaction verification server manufacturer, received merger approval from the Israeli Office of Chief Scientist (“OCS”).

Disclaimer: This is a press release. Bitcoinist is not responsible for this company’s products and/or services.

Spondoolies and BTCS to Merge

The OCS approval is one of two key closing conditions of the merger between BTCS and Spondoolies. The second key closing condition of the merger requires confirmation from the Israeli Tax Authority regarding deferred payment of applicable Israeli taxes related to the transaction.

Charles Allen, Chief Executive Officer of BTCS, commented,

“Our merger with Spondoolies marks a major milestone for us and sets the stage for rapid revenue acceleration in the years ahead. BTCS produced year-over-year revenue growth of 1,225% in 2015, while cash used in operations was reduced by 25%. To combine this strong performance with Spondoolies’ industry leading technology, which generated impressive revenues for its first and second generation products, we’ll be positioned to create a new global leader in the blockchain sector.”

“The blockchain is set to radically change the future of transaction-based industries,” stated Guy Corem, Chief Executive Officer of Spondoolies. “BTCS has positioned itself at the core of this disruptive transformation, and we are excited to combine forces to capitalize on the immense opportunities that lie ahead. The OCS approval places us one important step closer to completing the merger.”

After giving effect to BTCS’s recent $750,000 investment in Spondoolies, BTCS shareholders will own a 69.7% to 61.2% stake in the combined company, and Spondoolies shareholders will own 30.3% to 38.8% of the combined company, based on the number of common and preferred securities outstanding immediately following the merger. The ownership range is a function of BTCS’ liquidation preference associated with its existing $2.25 million investment in Spondoolies. The final ownership percentages will be determined prior to closing.

Allen continued, “We remain committed to improving shareholder value and fully believe in our ability to execute on key strategic initiatives in 2016. We’ve demonstrated that commitment with our recent move to voluntarily escrow a large number of our founders’ shares, representing 15% of the Company’s outstanding shares, pending the successful completion of the merger and an up listing of our common stock to a senior exchange. This effectively ‘puts our money where our mouth is’ as we move forward to achieve both of these important steps ahead of their respective year-end deadlines.”

Visit www.btcs.com for more information.

The post Spondoolies Tech Gets Approval for BTCS Merger appeared first on Bitcoinist.net.

Spondoolies Tech Gets Approval for BTCS Merger

Share