U.S. Government to Bitcoin: F&ck You (Not Really)



This past week, U.S. regulators issued a new cryptocurrency ruling and denied the last of the bitcoin ETF proposals.

Pundits say the moves show how much the U.S. government hates cryptocurrency and wants to crush bitcoin.

They’re wrong.

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?

Clear definitions

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.


https://markhelfman.com/2019/04/12/us-congress-will-pass-blockchain-bills-as-soon-as-somebody-tells-it-what-blockchain-means/
https://markhelfman.com/2019/03/01/why-the-sec-will-approve-a-bitcoin-etf/
https://markhelfman.com/traditional-finance-and-cryptocurrency/

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/

Comments 7


well, I live in Switzerland, it works a bit different here. But in a sense its true, unless regulators approve it will stay for the tech savvy or the rich...
But once the rich have accumulated enough they will let regulators approve and lobby congress (or whatever law making institution in your country) to let joe public in and watch prices explode

11.10.2019 10:43
1

I lost all my bitcoin in a boating accident.

11.10.2019 11:37
1

Pretty accurate assessment.

Basically, Congress, existing as usual in stasis, and currently being embroiled in impeaching the lawless petulant child that passes for our president, will do nothing until forced to do so.

As you've pointed out so ably in the past, Congress is largely clueless regarding cryptocurrencies, as are an astounding number of so-called financial "experts," so I'm simply grateful that, for now at least, they're mostly leaving us to our own devices.

Meanwhile, those of us already involved are at least not being singled out for microscopic oversight, so that's a blessing.

Live and let live is an excellent motto.

Posted using Partiko Android

11.10.2019 14:44
1

Hi @vdux

Great read buddy. Upvoted already. I'm very curious what H&R Block is about?

I'm glad IRS is being so serious about regulating crypto industry. Hopefully many other countries will follow.

ps. I would like to thank you for your latest resteem (project.hope post).

Yours, Piotr

16.10.2019 16:26
0

It's me again @vdux. This time a little bit off-topic (hope you don't mind)

You've read already about project hope and ... I think that you would like what we're doing and you could also benefit from being part of our small community. Your content fits very well to our interests.

I would love invite you you to become part of our group. There are no real expectations. No strings attached.

Let me know how does it sound.

And also tell me if you use telegram? (you could find me there: crypto_piotr)

Together with few guys, we've created telegram channel for our small team and everyone involved is sharing link to new published posts with others via this channel.

I'm inviting slowly and steadily people sharing similar interests; people I found valuable and responsive. The only expectation we all have is to support each other whenever we can, with some valuable comments and upvotes.
(The only rule is that noone is posting links on this channel more then once or twice a week max. Simply o avoid one person dominating entire channel).

Cheers
Piotr

16.10.2019 16:27
0

I enjoyed your writing style and the article. Kept me reading until the very end. Lots of good info to think about.

03.12.2019 15:55
1

Thanks for the kind comment! Good to hear from you, buddy.

05.12.2019 16:07
0