Pundits say the moves show how much the U.S. government hates cryptocurrency and wants to crush bitcoin.
Commodity Futures Trading Commission (CFTC) said it will allow Ethereum futures and Securities and Exchange Commission (SEC) regularly consults with community leaders. Internal Revenue Service's tax rules may not make sense, but at least it's taking crypto seriously.
Step back and take a look at the big picture. Life's not so terrible.
Cryptocurrency is property. Why so mad?
I used to work for H&R Block.
Granted, I worked in their lobbying, er, I mean, “government relations” department. As a result, I didn’t need to know tax law. I only needed to know how the laws made it harder or easier for H&R Block to make money.
But I did have to learn how the IRS makes decisions. I also needed to understand the general principles behind the tax code.
My takeaways from the IRS ruling:
Some good rules
IRS rules aren’t all bad.
For example, IRS decided you have to pay taxes on hard forks only if you get new tokens.
As a result, you don’t need to report every Steem fork as a taxable event, nor pay taxes when your tokens move from their erc-20 standard to their respective mainnets.
Likewise, you do not pay taxes on soft forks.
While those decisions sound obvious, U.S. regulations never addressed this. Did you know how to handle these events?
IRS created new definitions for some cryptocurrency terms. Not technical definitions, but legal definitions---the kinds of definitions you can only understand if you have an accounting degree.
These definitions may not jive with yours. While you may disagree with the IRS, at least you know what they're talking about and what you need to do in response.
(And yes, “leave the U.S.” is a certainly an option.)
It’s not the IRS you need to get mad at
I get why people dislike the IRS rules. Personally, I don’t see what the fuss is all about.
IRS has always treated cryptocurrency as property. It really has no choice---it has to base its rules on 80-year-old U.S. laws that never considered the idea of cryptocurrency. Under those laws, property fits best.
What else can it do? Regulators don't make the laws, they only enforce the laws.
As a result, you get rules that fit the laws, not the technology.
If you want to get sensible cryptocurrency laws, target Congress. Once Congress changes the laws, IRS will have to comply.
Consensusland, a Readers’ Favorite 5-star book about a country that runs on cryptocurrency. You can also catch him on Medium. He publishes every Friday.
Posted from my blog with SteemPress : https://markhelfman.com/2019/10/11/u-s-government-to-bitcoin-fck-you-not-really/