According to the recent tax treatment guidance issued by the Internal Revenue Service (IRS) Bitcoin has to be considered as property. Those who hold or use Bitcoin are attempting to read between the lines to understand the principles of taxation and the obligations of every entrepreneur, miner on investor operating in the online financial market.
The journalist behind the name, Justin, has provided SilentVault with valuable analysis showing that there are no real dangers for law-abiding citizens.
IRS Drops the Hammer on Virtual Currencies
The IRS has published a Q&A guidance to clarify the treatment of Bitcoin. The exhaustive response from the society has included everything – scares, doubts and many more questions.
Bitcoin opponents consider the new regulations as one more hammer blow of fate which will ultimately fell the hero. Supporters meanwhile are trying to understand the necessary alterations to their current bookkeeping routine.
Justin poses the main question. According to his conclusions no one can assess the impact of a tax agency's guidance without first asking themselves how it is that tax liability arises in the first place. (Or at any rate, no one should.) What makes the use of virtual currencies subject to the jurisdiction of the IRS to begin with?