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The Infrastructure Bill Shows Why Bitcoiners Need To Be Politically Active

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This is simply the latest development that shows the lack of understanding amongst policy makers.

The Senate procedural vote held late Wednesday night was a big step forward in the difficult process of brokering such a large infrastructure package in Congress. This is, however, the very first step for the package, and requires a few more hurdles before it reaches President Biden’s desk for an official signing to become law.

Naturally, the actual text of the bill was not released prior to this procedural vote, which means that one can only surmise what the circulating draft language from various fact sheets could mean for bitcoin holders, miners, and related companies.

The fact that all of us in this industry are trying to interpret what the broad and vague language could mean for bitcoiners is indicative of two things in particular — the senators, and their staffers, are highly uneducated on both bitcoin and on the innovative and tenacious nature of bitcoiners.

This should be a wake-up call for bitcoiners to bring their education and fiery passion for a bitcoin standard beyond the 280-character limit on Twitter and into the legislative halls.

While we do not know what the future of our American government will look like, we do have to navigate the current legacy system while we actively lay the groundwork for a new monetary system rooted in proof-of-work.

Bitcoiners are some of the most knowledgeable individuals on economic principles and theories today, but they are also some of the most reserved individuals to educate those who make decisions that directly affect our lives and the U.S. economy.

I urge bitcoiners to shed the laissez-faire attitude to government and to instead become Bitcoin champions in their communities, and with their local representatives.

Immediately contact your Senator to share your concerns with the proposed infrastructure bills (both the $1 trillion physical package, and the $3.5 trillion budget reconciliation), and be sure to reference both specific issues with the language and state your concerns about the cost to the taxpayer.

Worth noting — the $3.5 trillion budget reconciliation bill will be difficult to pass and is already receiving pushback from both Senate and House members.

We all know that this bill will not be the last attempt to milk bitcoiners for additional sources of revenue to support federal or state programs, but it could be one of the last with minimal advocacy and pushback from bitcoiners.

Bitcoiners have jumped in the lifeboat, but we must now survive the waves of misinformation about inflation and our floundering U.S. dollar. The most peaceful and bright future relies upon immense education about bitcoin and how it is the solution to these unfeasible spending packages. This education needs to be shared at city council meetings, county supervisor meetings, state house legislative sessions, churches, and beyond.

Federal Outreach:

  • Search for your senator’s name on senate.gov and go to their website to contact their district and/or capitol office.
  • The most effective strategy is to cite specific line items from the bill once the text is released. But this may be difficult considering the speed at which the legislation could move so be sure to at least urge your senator to reconsider support for the proposed legislation until considerable changes are made.
  • Additionally, once this bill leaves the Senate it will go to the House; do the same form of advocacy ahead of time, by reaching out about your concerns now. Search for your representative on house.gov and go to their website to contact their district and/or capitol office.

This is a guest post by Trystine Payfer. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

South Korea Proposes Law Allowing Direct Seizure and Sale of Crypto Assets to Pay Overdue Taxes

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South Korea Proposes Law Allowing Direct Seizure and Sale of Crypto Assets to Pay Overdue Taxes

The South Korean government has proposed an amendment to the tax code to allow the country’s tax authority to seize and sell cryptocurrencies belonging to delinquent taxpayers. “The revision will allow direct seizing without court-approved change in ownership records. Assets held by tax dodgers in the form of digital coins will no longer evade seizure and forfeiture,” said a government official.

Korean Government Wants Ability to Seize and Sell Cryptocurrencies of Delinquent Taxpayers

  • South Korea’s finance ministry announced the 2021 Tax Law Amendment Bill Monday, which is part of the government’s annual review of its tax system.
  • The bill includes a proposal to empower the country’s tax authority, the National Tax Service (NTS), to seize and sell cryptocurrencies belonging to tax delinquents starting Jan. 1, 2022, the Korea Times reported.
  • The government explained that the number of cases where tax delinquents use cryptocurrencies to hide their assets is increasing. The bill aims to crack down on tax evasion by crypto owners.
  • Under the proposed law, crypto exchanges must cooperate with the authorities and will be required to transfer cryptocurrencies to the government immediately upon request.
  • In case of non-compliance, properties may be searched and assets may be confiscated as deemed necessary by the authorities. The proceeds from the sale of seized crypto assets will go into the state coffer.
  • Korean lawmakers have voiced concerns that current regulations make it difficult to confiscate crypto assets which must be done under the existing bond seizure regulations. Not only can the process be disputed but a court-granted change in ownership records also cannot be applied to crypto assets that lack physical presence, the publication conveyed.
  • A ministry official was quoted as saying:

Property seizure procedures cannot be applied when the assets to be claimed by the government are kept in electronic wallets. The revision will allow direct seizing without court-approved change in ownership records. Assets held by tax dodgers in the form of digital coins will no longer evade seizure and forfeiture.

  • “Going after tax evaders is part of South Korea’s broader probe to tighten oversight of crypto markets to root out money laundering and other financial crimes using cryptocurrencies, as President Moon Jae-in looks to expand the tax base to fund increased welfare spending,” Reuters described.
  • The finance ministry said it will submit the revisions made to the 16 tax codes by Sept. 3. The proposal needs approval from lawmakers to make it enforceable.

What do you think about this new crypto confiscation proposal by the Korean government? Let us know in the comments section below.

IRS Modifies Crypto Question on Tax Form — Now Focusing on Taxable Cryptocurrency Transactions

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IRS Modifies Crypto Question on Tax Form — Now Focusing on Taxable Cryptocurrency Transactions

The U.S. Internal Revenue Service (IRS) has modified the crypto question asked on the main U.S. tax form. Reducing the scope of the question, the IRS now focuses on taxable cryptocurrency transactions.

New Crypto Question on Tax Form 1040

The IRS published a draft Form 1040 for the tax year 2021 Thursday. Form 1040 is the main tax form used for filing individual income tax returns in the U.S. The draft form shows that the tax agency has modified the crypto question slightly.

The crypto question now reads: “At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?”

Previously, the question read: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

Draft IRS Form 1040 for the year 2021.

For the year 2021, the IRS has removed the word “send” and replaced “acquire” with “disposed of.”

IRS Form 1040 for the year 2020.

Shehan Chandrasekera, Head of Tax Strategy at tax software company Cointracker, explained that “The revised question only inquires about your taxable transactions compared to the much broader scope of the 2020 version.”

He opined, “Although these changes have no big impact on your taxes, it hints at what the IRS has learned from the 2020 version and the direction it’s heading,” elaborating:

Under the revised question, you don’t have to check ‘Yes’ if you send cryptocurrency in between wallets/exchanges or acquire them, which are both non-taxable transactions.

What do you think about the new crypto question on the tax form? Let us know in the comments section below.

Plan B Passports Offers Bitcoin Tax Relief Through New Residence And Citizenship

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Plan B Passports offers Bitcoiners the ability to legally avoid taxes on their BTC profits.

If you would like to avoid onerous capital gains taxes after spending or selling BTC following boom cycles, then there is a service just for you.

Bitcoin maximalist and entrepreneur Katie Ananina helps bitcoiners who have made significant gains on their BTC holdings to legally avoid such taxes by obtaining a second passport through her company Plan B Passports. It offers clients seven different passport options for nations with favorable tax regulations, including credentials for Portugal, Saint Kitts and Nevis, Saint Lucia, Grenada, Antigua and Barbuda, Dominica and Vanuatu, according to CNBC. Obtaining a passport to one of these countries gives someone the opportunity to bypass heftier capital gains taxes required by countries like the U.S.

Image Source: CNBC

This is made possible by partnerships that Plan B Passports has acquired with governments’ residence- or citizenship-by-investment programs. Plan B Passports’ customers find a way to avoid paying major bitcoin taxes, while the countries that furnish the new passports receive a new stream of foreign investment.

“In Saint Lucia you can obtain citizenship by an investment of between $100K (donation), $250K (government bonds) or $300K (real estate),” an attorney with international tax law firm Andersen, Ernest Marais, explained via email to CNBC.

Ananina shared that the average cost for these passports range from $130,000 to $180,000.

“It’s basically a donation into the sustainable growth fund of the country,” she told CNBC. “So, clients make a $100,000 or $150,000 donation, plus some due diligence fees, government fees, and then $20,000 for my legal fees.”

These donations can also be very beneficial to countries that don’t have many natural resources, and can then allocate those funds for what they need.

Buying bitcoin when it’s price is low and holding it until the price rises is an accomplishment to be proud of. When Bitcoiners finally decide to part with some of their sats to purchase goods or services, they don’t want to pay capital gains taxes. Ananina has done that herself, and wants to help others who don’t want to pay taxes on these gains to governments that she feels don’t deserve them.

“I was smart enough to figure out that $200 in bitcoin will be worth $100,000 at some point,” said Ananina, according to CNBC. “I don’t think the government should have 40% of that.”

Ananina also said that her business is booming, and that she’s booked out three weeks ahead for consultation calls. And it seems likely that as bitcoin’s price once again approaches new all-time highs, we’re only going to see more people searching for capital gains tax relief.

Image Source: CNBC

NCLA Files Appeal Against the IRS — Law Firm Claims Tax Agency Unlawfully Seizes Crypto Data of Thousands

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On Friday, the public interest law firm New Civil Liberties Alliance (NCLA) filed an opening brief in the cryptocurrency case of James Harper v. Charles P. Rettig. The NCLA argues that Harper’s Fourth and Fifth Amendment constitutional rights were violated by the Internal Revenue Service (IRS). The U.S. tax agency is accused of obtaining Harper’s information from crypto asset exchanges without valid subpoenas or statutory limitations.

IRS Accused of Accessing American Citizens’ Private Information Without Following Statutory Limitations on Power to Issue Subpoenas

The NCLA has revealed it filed an opening brief in the case James Harper v. Charles P. Rettig in the U.S. Court of Appeals for the First Circuit. The NCLA is a nonpartisan nonprofit civil rights entity and public interest law firm that aims to protect constitutional freedoms from violations by the government.

The case involves a man named James Harper who has brought litigation against the IRS, the 49th commissioner of the U.S. tax agency Charles Rettig, and 10 “John Doe IRS agents.” The NCLA and Harper argue that the IRS took Harper’s financial information without “reasonable suspicion and without a judicial warrant.”

“Harper has plausibly pled that [the] IRS violated his constitutional and statutory rights,” the civil rights organization’s opening brief details.

It all started in 2019 when the IRS sent Harper a letter stating that he did not “properly report” his “transactions involving virtual currency.” The IRS also published a press release that summer that revealed 10,000 American cryptocurrency owners received a letter from the tax agency. The letters were sent to taxpayers who have “participated in virtual currency transactions or otherwise did not report past transactions properly,” the IRS noted.

“Taxpayers should take these letters very seriously,” IRS Commissioner Charles Rettig emphasized in the press release.

IRS Hides Behind Anti-Injunction Act, Supreme Court Says the Tax Agency ‘Cannot Block Lawsuits Challenging Constitutionality’

The NCLA and Harper are hoping the Appellant Court allows an oral argument of the case. The civil liberties law firm wholeheartedly believes this case affects the plaintiff’s constitutional rights. “This case presents important legal questions about whether the sovereign immunity of the United States bars suits challenging the government’s illegal information-gathering practices and whether injunctive or declaratory relief is available in such situations,” the NCLA’s opening brief stresses.

Caleb Kruckenberg, a litigation counsel member of the NCLA, said that he believes the First Circuit can fix this situation. “Earlier this year, the Supreme Court held that the IRS cannot block lawsuits challenging the constitutionality of its behavior by hiding behind the Anti-Injunction Act,” Kruckenberg said in a statement to Bitcoin.com News. “Unfortunately, that decision came out after the district court allowed the IRS to abuse the law in just that way. According to the Supreme Court, though, this case is a ‘cinch,’ and the First Circuit should swiftly reinstate this lawsuit.”

NCLA litigation counsel member, Adi Dynar, says the IRS does not have a sufficient reason to “claim that the information it possesses” can be obtained without due process. Dynar says that if the IRS took proper procedures then it could result in the assessment or collection of taxes. “But the Fourth and Fifth Amendments to the Constitution do not contain an IRS exception,” Dynar said in a statement. The NCLA’s opening brief describes how the IRS violated Harper’s rights and obtained his financial information from third parties.

“[The] IRS’s actions violated core constitutional protections under the Fourth and Fifth Amendments,” the NCLA opening brief details. “Assuming the IRS took his information from one or more exchanges, Mr. Harper’s contracts recognized that his data is his property, not that of the exchanges, and supplied him with a reasonable expectation of privacy in his personal information. The contracts made clear that he did not voluntarily surrender his Fourth Amendment rights by doing business with them. The IRS seized his information without due process.” The NCLA further added:

IRS did not provide Mr. Harper with any notice or opportunity to contest its lawless information gathering. That lack of process violates the Fifth Amendment’s due-process guarantee. IRS’s third-party collection of Mr. Harper’s information is also a Fourth Amendment trespass against Mr. Harper because it seized his personal papers without a warrant. The IRS also failed to protect Mr. Harper’s statutory rights when it obtained his personal papers from third parties.

The NCLA’s brief notes that the IRS should have its interest aligned with Harper’s rights and the tax agency should have obtained the records in compliance with the Fourth and Fifth Amendments. “The Court should conclude that the district court has subject-matter jurisdiction and that Mr. Harper has stated a claim upon which relief can be granted,” the NCLA’s opening brief concludes.

What do you think about the case against the IRS? Let us know what you think about this subject in the comments section below.